Refer to the Exhibit

question 168

Multiple Choice

Refer to the exhibit. If the profit margin of an organization decreases, and all else remains equal, which of the following describes how the "Funds Needed" line in the graph below will shift?

• A) The "Funds Needed" line will remain pointed upward, but will become less steep.
• B) The "Funds Needed" line will remain pointed upward, but will become more steep.
• C) The "Funds Needed" line will point downward with a minimal slope.
• D) The "Funds Needed" line will point downward with an extreme slope.

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Definitions:

Stock Options

Financial derivatives that give the holder the right, but not the obligation, to buy or sell a stock at a predetermined price within a specific period.

Promissory Estoppel

A legal principle that prevents a party from backing out of a promise which led the other party to take action or abstain from it, based on the promise.

Illusory Promise

A statement that appears to be a promise but does not actually bind the party making it to any action or performance, rendering it unenforceable as a contract.

Release

A legal document or agreement resulting in one party forfeiting the right to make claims against another party in exchange for a settlement or relief.