Judith Is a CPA with an Excellent Reputation and Client

question 19

Multiple Choice

Judith is a CPA with an excellent reputation and client base.She sells her tax preparation business to Shawn,and the sales contract includes a noncompete clause restricting Judith from opening a similar business for two years within a 10-mile radius of her former office.If she opens a tax preparation office five miles away after one year,a court would probably:

• A) grant an injunction barring her from operating the new office.
• B) order confiscation of all of her new client files and turn them over to Shawn.
• C) refuse to become involved, as the noncompete clause was illegal.
• D) refuse to enforce the noncompete clause, as it is unreasonable regarding time and geographic area.

---

Definitions:

Costs Associated

Expenses that are linked to a specific product, activity, or department within a business.

Special Order

An order for a product or service that is outside of the company's regular operations or production schedule, often requiring special pricing or conditions.

Excess Capacity

Refers to a situation where a company has more production capability available than is necessary to meet demand, often resulting in unused resources or facilities.

Financial Advantage

A benefit that helps to improve a company's financial position, which can include lower costs, access to new markets, or additional revenues.