A Refusal to Deal

question 8

Multiple Choice

A refusal to deal

• A)is a right to decide with whom to do or not to do business and cannot be legally limited.
• B)is a rule of reason violation of the Sherman Act and is illegal if it harms competition.
• C)is an agreement in which a buyer refuses to purchase goods from a supplier unless the supplier also purchases items from the buyer.
• D)occurs when a manager refuses to recognize that price-fixing is a problem.

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Definitions:

Reinvestment Assumption

The theory that cash flows will be reinvested at a constant rate, often used in financial modeling.

Cost of Capital

The rate of return that a business must achieve in order to generate value, representing the opportunity cost of investing capital in a specific business rather than in an alternative venture.

Average Return

A statistical measure representing the mean outcome or yield from an investment over a given period of time.

NPV

Net Present Value; a calculation used to determine the value of an investment by subtracting the present values of cash outflows (including initial cost) from the present values of cash inflows over a period of time.