You Go to a Flea Market and Buy a LCD

question 102

Multiple Choice

You go to a flea market and buy a LCD TV for $100. One day you receive a notice that the owner of the TV, which had been stolen from her house and sold by the thief at the flea market, wants the set back. She says if you do not return the TV she will sue you for:

• A) fraud, and probably win even though you did not know the set was stolen
• B) conversion, and probably lose because you did not know the set was stolen
• C) fraud, and probably lose because you did not know the set was stolen
• D) theft, and probably lose because you did not know the set was stolen
• E) none of the other choices

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Definitions:

Net Present Value (NPV)

A method used in capital budgeting to evaluate the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.

Internal Rate of Return (IRR)

The specific rate at which the net present value of a project's cash flows equals zero.

Incremental Cash Flows

Incremental cash flows are the additional cash inflows or outflows expected from a new project or investment when compared to a baseline scenario.

Net Operating Working Capital

The difference between a company's operating current assets and its operating current liabilities, indicating the efficiency and short-term financial health in the company's core operations.