Alannis Is an Agent but Not an Employee of Tesky's

question 9

Multiple Choice

Alannis is an agent but not an employee of Tesky's Inc, a large department store business.She acts as an agent for the corporation in entering contracts with suppliers to buy clothes.While she is on a trip to Toronto to visit a long-time supplier, Tesky's goes bankrupt.The next day, Alannis, while still unaware of the bankruptcy, enters into a contract with the supplier on behalf of Tesky's to buy $20 000 worth of clothes.Which of the following is TRUE?

• A)The contract is enforceable by the supplier because the supplier could rely on Alannis having apparent authority to contract on behalf of Tesky's based on its past experience in dealing with her.
• B)The contract is not enforceable against Tesky's because Tesky's bankruptcy terminates the agency relationship.
• C)The contract is enforceable against Tesky's because Alannis was not aware of the bankruptcy.
• D)The contract is enforceable against Alannis since she could not have contracted as the agent of Tesky's after the bankruptcy.
• E)The contract is enforceable against Tesky's because the supplier had no notice of the bankruptcy at the time of contracting.

Comprehend the concept of financial leverage and its impact on a firm’s earnings per share (EPS) and earnings before interest and taxes (EBIT).

Understand the role and implications of corporate and personal taxes in capital structure decisions according to the MM and Miller models.

Recognize the assumptions and limitations of theoretical models such as the MM and Miller models, especially concerning taxes and bankruptcy costs.

Identify the factors influencing a firm's decision to adjust its debt ratio and the principle of the trade-off theory.

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Definitions:

Development

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Organism

A living thing that has the ability to act or function independently.

Wharton's Jelly

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