Geoffrey Made Arrangements for Storing His Houseboat for the Winter

question 48

Multiple Choice

Geoffrey made arrangements for storing his houseboat for the winter at BoatsRStored4U Inc.What is the most immediate legal question that Geoffrey should be clear on before he allows the storage company to take physical possession of his boat?

• A) When should he provide proof of ownership and valuation?
• B) What will happen if BoatsRStored4U goes out of business?
• C) Who will bear the risk of loss or damage and have the obligation to purchase insurance?
• D) How will BoatsRStored4U bill him for its services?

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Definitions:

Cost Of Capital

The rate of return that a company must earn on its investments to maintain its market value and attract funds.

NPV

Net Present Value, a method used in capital budgeting to evaluate the profitability of an investment or project.

Beta

A measure of the volatility, or systematic risk, of a security or a portfolio in comparison to the market as a whole, where a beta greater than one indicates higher than market volatility and less than one indicates lower.

Security Market Line

The Security Market Line graphically represents the expected return of assets as a function of their systematic, non-diversifiable risk.