Erma Enters into a Contract to Buy a Tract of Riverfront

question 49

Multiple Choice

Erma enters into a contract to buy a tract of riverfront property from Forest Acres to build and sell a residential development. Forest Acres fails to close the sale. Erma's remedy is most likely

• A) the amount that Erma invested in the project to the date of the closing.
• B) nothing-Forest Acres still owns the land.
• C) the difference between the contract and market prices of the land.
• D) specific performance.

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Definitions:

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock, typically with fixed dividends.

Tax Considerations

The factors concerning the tax implications of any financial decision, investment strategy, or transaction, which can affect the overall benefit or cost to an individual or business.

Risk Tolerance

An individual's or financial entity's capacity to endure loss or volatility in investment value while attempting to achieve investing goals.

Weighted Average Cost

A calculation that takes into account the various costs of goods based on their relative weights, to arrive at an average cost per unit.