Leon Contracts to Install Automatic Watering Troughs in Kendall's Dairy

question 68

Multiple Choice

Leon contracts to install automatic watering troughs in Kendall's dairy barn. Leon then becomes seriously ill and contracts with Jake to install the troughs. Jake is unreliable and never shows up to install the troughs. In most states, Kendall can sue

• A) no one .
• B) Jake only.
• C) Leon only.
• D) Jake or Leon.

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Definitions:

Internal Rate Of Return

A financial metric used to estimate the profitability of potential investments, calculated as the rate of return that makes the net present value of all cash flows from a particular project equal to zero.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment, calculated by subtracting the projected cash outflows from the present value of cash inflows.

Opportunity Cost

The cost of foregoing the second-best option when making a decision, representing the benefits that could have been received by taking a different action.

Make-Or-Buy Decision

A decision-making process used by businesses to determine whether to produce goods in-house or purchase them from an external supplier.