Ski Shop Sells a Pair of Skis to Tammy

question 37

Multiple Choice

Ski Shop sells a pair of skis to Tammy. When Tammy uses the skis, they snap in two. The cause is something that the seller did not know about and could not have discovered. This is a breach of

• A) the implied duty of inspection.
• B) the implied warranty of merchantability.
• C) an express warranty.
• D) the implied warranty of title.

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Definitions:

Compound Leverage Factor

A measurement used to describe the magnification of risk and return caused by using borrowed money or financial derivatives within an investment.

Financial Leverage

The use of borrowed money to increase the potential return of an investment, which also increases the risk of loss.

Operating Leverage

A financial ratio that measures the proportion of fixed costs in a company's cost structure, indicating how a change in sales volume will impact operating income.

Economic Value Added

A measure of a company's financial performance based on the residual wealth calculated by subtracting a firm's cost of capital from its operating profit.