Bob Is the Promoter of a New Corporation That Has

question 58

True/False

Bob is the promoter of a new corporation that has not yet been incorporated. On behalf of the as yet unincorporated business, he enters into a three-year lease agreement for office space and personally signs the lease in his own name. The corporation is liable on the contract, because Bob is its agent.

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Definitions:

Margin Of Safety

The difference between actual sales and break-even sales, indicating the amount by which sales can drop before losses begin.

Percentage Of Sales

A financial ratio that compares a particular figure or total, such as profit or expense, to the total sales revenue.

Margin Of Safety

The difference between actual or projected sales and the break-even point, indicating the risk level of not covering fixed costs.

Digital Camera

An electronic device that captures and stores photographs digitally, allowing for immediate viewing, deleting, or transferring of images.