Which of the Following Is True of Unenforceable Contracts

question 13

Multiple Choice

Which of the following is true of unenforceable contracts?

• A) They are not valid contracts.
• B) They are the same as voidable contracts.
• C) They can be made enforceable by making a few changes to them.
• D) They are contracts made for an unlawful purpose and the parties can be imprisoned.

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Definitions:

Variable Expenses

Costs that vary directly with the level of production or sales volume.

Break-even Point

The point at which total costs and total revenues are exactly the same, yielding neither a profit nor a loss.

Degree of Operating Leverage

The degree of operating leverage is a financial ratio that measures the sensitivity of a company's operating income to its sales, indicating how earnings before interest and taxes are affected by sales volume.

Fixed Expenses

Costs that do not vary with the level or amount of goods or services produced or sold.