A Company Is Sending a Shipment to Its Customer in Italy

question 96

Multiple Choice

A company is sending a shipment to its customer in Italy. It elects to pay the freight and be responsible for any liability and damage claims. Which of the following free on board (FOB) terms is the company using?

• A) FOB destination, freight collect
• B) FOB destination, freight prepaid
• C) FOB origin, freight prepaid
• D) FOB origin, freight collect

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Definitions:

Incentives

Motivational factors or mechanisms that encourage individuals or groups to behave in a certain way or to take specific actions.

Lump-Sum Taxes

Taxes that are the same amount for everyone, regardless of the taxpayer’s income level or ability to pay.

Marginal Tax Rates

The percentage of tax applied to the last dollar earned, indicating the fraction of any additional income that will be taken in taxes.

Inflation-Adjusted

An adjective describing the modification of financial figures to reflect changes in the purchasing power of money, allowing for comparison over time.