Tom Makes Pottery in His Spare Time

question 37

Multiple Choice

Tom makes pottery in his spare time.Jackie asks if he'd sell her a covered bowl.Later that day, he telephones her and says she can have it for $50.She agrees, so he tells her he'll wrap it up for her and it will be ready in half an hour.Six days later, Jackie had not yet come for the bowl when a dog knocks the box off the shelf and breaks the bowl.Who is liable?

• A) Jackie, because Tom had tendered the bowl to her nearly a week earlier.
• B) Tom, because Jackie had not yet received the bowl.
• C) Jackie, because she had identified the bowl.
• D) Tom, because the bowl was in his possession when the dog broke it.

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Definitions:

Financial Leverage

The use of borrowed funds to finance investments, aiming to increase the potential return to equity holders.

Business Risk

The exposure a company or investor faces from uncertainties that may impact its operations and profitability.

Financial Risk

The possibility of losing money or financial assets due to factors affecting financial markets, investment decisions, or company performance.

Weighted Average Cost

Reflects the average cost per unit of inventory, factoring in all costs of items purchased at various prices.