DB Offered to Sell a Cap for $10

question 73

Multiple Choice

DB offered to sell a cap for $10. Dan asked if she would give him 2 hours to think about it. She said, "Sure." Dan checked eBay, learned the hat was worth $100, but before he could call to accept the offer, she revoked it.​

• A)There is a contract for the sale of the hat if the 2-hour period had not expired, because she promised to keep the offer open.
• B)There is a contract for the sale of the hat, but only if the offer was in writing.
• C)There is a contract because of the option.
• D)There is no contract because DB revoked the offer prior to acceptance and there was no consideration for her promise to keep it open.

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Definitions:

Incremental Analysis

A decision-making technique used to determine the financial impact of different choices by comparing their costs and benefits.

Variable Cost

Expenses that fluctuate with production volume, such as direct materials and direct labor costs.

Fixed Expenses

Fixed expenses are recurring costs that do not fluctuate with changes in production level or sales volume, such as rent, salaries, and insurance.

Net Present Value

Net present value is a financial calculation that determines the worth of a project or investment by discounting its future cash flows to the present value using a specific discount rate, to assess its profitability.