​Fact Pattern 10-4

question 35

Multiple Choice

​Fact Pattern 10-4
Alain and Brie sign a contract for the sale of Alain's Patisserie to Brie. The parties intend their written contract to be a final statement of most, but not all, of the terms of their agreement-Alain must first buy the building from Commercial Properties, Inc., after which Alain and Brie will agree on a price.
-Refer to Fact Pattern 10-4. Brie later disputes some of the provisions of the deal with Alain. If the dispute results in litigation, a court will most likely admit evidence of additional terms that are​

• A) ​ambiguous.
• B) ​consistent.
• C) ​contradictory.
• D) ​clear.

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Definitions:

Operating Leverage

The degree to which a firm or project can increase operating income by increasing revenue, a measure of how sales growth translates to growth in operating income.

Forecasting Error

The difference between the actual outcome and the predicted value in a forecast.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating a company's fixed versus variable costs.

Variable Costs

Expenses that change in proportion to the level of production or sales, such as raw materials and labor costs.