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.

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Definitions:

Standard Deviation

A statistic that measures the dispersion or variability of a set of data values around the mean (average) of those values.

Expected Profit

The forecasted amount of profit that a business or investment is projected to earn over a specific period.

Japanese Yen

The official currency of Japan, often represented by the symbol ¥.

Risk Averse

A risk-averse individual prefers certainty over uncertainty and would opt for a guaranteed outcome over a gamble with potentially higher, yet uncertain, rewards.