Abram Is Excited Because He Has Just Signed an Agreement

question 176

Multiple Choice

Abram is excited because he has just signed an agreement to purchase steel frames from a company at an excellent price and of very high quality.Once the contract begins, Abram eagerly awaits the first shipment, but it arrives a month behind the agreed-upon schedule, which slows down production at the plant.Abram is furious because he realises too late that this supplier

• A) produces poor quality.
• B) has bad credit terms.
• C) is unreliable.
• D) is not as inexpensive as he thought.
• E) is unscheduled.

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Definitions:

Loan to Value Ratio

A financial term employed by lenders that denotes the ratio between a loan amount and the value of an asset acquired.

Down Payment

An initial payment made when something is bought on credit.

Compounded Quarterly

A method of calculating interest where it is added to the principal amount every three months.

Amortized

The process of paying off a debt through regular payments over a period of time, where each payment covers both interest and a portion of the principal amount.