Precision Engineering Receives a Contract to Design and Build a Sewage

question 9

Multiple Choice

Precision Engineering receives a contract to design and build a sewage treatment plant from the town of WaWa. It designs the project and assigns the construction to Dynamic Construction Ltd. The contract has no provisions regarding assignment. Can Precision make the assignment to Dynamic?

• A) No, it can only do a novation.
• B) Yes, if it obtains the approval of WaWa.
• C) Yes, if it notifies WaWa.
• D) Yes.
• E) No.

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Definitions:

Interest Rate

Lenders require a payment, portrayed as a percentage of the principal, from borrowers for the use of their assets.

Loanable Funds

The market where savers supply funds for loans to borrowers, often facilitated by financial institutions, impacting the interest rates and investment in the economy.

Government Budget Deficit

The financial situation where a government's expenditures exceed its revenues within a specific fiscal period, leading to borrowing or debt accumulation.

National Saving

The total income in an economy that remains after deducting consumption expenditures and government spending.