Van Is Using His Wrench as a Hammer When the Wrench

question 12

Multiple Choice

Van is using his wrench as a hammer when the wrench breaks and a piece flies off,injuring his neighbor who is helping Van change a tire on Van's car.If Van sues the tool manufacturer,its best defense will be:

• A) consent.
• B) warranties have been disclaimed.
• C) product misuse.
• D) that the claim is an economic loss only.

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Definitions:

Cash Payback Period

The duration of time it takes for an investment to generate enough cash flow to recover its initial cost.

Net Income

The total earnings of a company after all expenses and taxes have been deducted from revenues, indicating profitability.

Straight-Line Rate

A method of calculating depreciation by dividing the difference between an asset's cost and its salvage value by the number of years it is expected to be used.

Annual Rate

The interest rate or growth rate over a period of one year, used for comparing investment returns or loan costs.