Vertical Restraints in a Contract

question 61

Multiple Choice

Vertical restraints in a contract

• A)are generally illegal in the U.S.
• B)usually benefit the firm that produces the raw inputs to the production process.
• C)are used in vertical mergers.
• D)can approximate the outcome of a vertical merger.

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Definitions:

Solvency

The ability of an entity to pay its long-term debts and financial obligations as they become due.

Cash Ratio

A liquidity ratio that measures a company's ability to repay short-term obligations with cash and cash equivalents alone.

Days To Collect

A financial metric that estimates the average number of days it takes a company to collect payment after a sale has been made, also known as the accounts receivable turnover in days.

Receivables

Money owed to a company by its customers or other parties for goods or services provided on credit, recorded as an asset on the balance sheet.