The Amount of Liquidated Damages Included in a Contract That

question 70

Multiple Choice

The amount of liquidated damages included in a contract that would be upheld by a court:

• A) must be reasonable in light of the inconveniences or lack of feasibility of obtaining an adequate remedy.
• B) may be so high as to be punitive to the breaching party.
• C) may be regarded as a penalty.
• D) All of these.
• E) None of these.

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Definitions:

NPV

Net Present Value, a method used in capital budgeting to analyze the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Internal Rate of Return

A metric used in capital budgeting to estimate the profitability of potential investments, calculated as the discount rate that makes the net present value of all cash flows zero.

Required Return

The minimum return an investor expects to achieve on an investment, considering the investment's risk level.

NPV

or Net Present Value, is a financial metric used to evaluate the profitability of an investment or project, calculating the difference between the present value of cash inflows and outflows.