Hiram Is About to Agree to Sell a Specific Antique

question 13

Essay

Hiram is about to agree to sell a specific antique book to Natasha for $30 000.Hiram is willing to let Natasha have possession of the goods immediately.Furthermore, he is willing to sell the book on credit and to allow her to pay in ten monthly instalments.However, he is also concerned that she might become insolvent before paying the full price.If that occurred, he would want to be able to recover the book itself, rather than simply sue Natasha.After all, if she becomes bankrupt, she will not have enough money to fully satisfy all of the claims against her.Is Hiram's position truly at risk? If so, is there anything that he can do when creating his contract with Natasha to protect himself? Explain your answer.

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Definitions:

General Transfer-Pricing Formula

A method or set of guidelines used to determine the price at which goods and services are transferred between departments or divisions within the same company.

Transfer Price

The cost at which products and services are exchanged among departments within the same corporation.

Annual Capacity

The total amount of output or production a company can achieve in a one-year period under normal conditions.

Income Taxes

Taxes levied by governments on individuals or entities' income, varying widely in rates and structures across jurisdictions.