Watercourse Pipe Company Includes in Its Contracts a Provision That

question 16

Multiple Choice

Watercourse Pipe Company includes in its contracts a provision that reads, in large red letters, "There are no warranties that extend beyond the description on the face hereof." This disclaimer negates

• A) the implied warranty of fitness for a particular purpose.
• B) the implied warranty of merchantability.
• C) the implied warranty of title.
• D) none of the choices.

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Definitions:

Incremental Annual

Incremental annual refers to the year-over-year changes or additional amounts in revenue, cost, or other financial metrics.

Internal Rate

Typically refers to the internal rate of return (IRR), which is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.

Discount Rate

A discount rate employed to ascertain the present worth of future cash flows within discounted cash flow analysis.

Net Present Value

The difference between the present value of cash inflows and the present value of cash outflows over a period of time, used in capital budgeting to analyze the profitability of an investment or project.