In Naples V

question 375

Multiple Choice

In Naples v. Keystone Building and Development Corp. in which the Naples sued Keystone for the cost of repairing major problems in the house Keystone built for the Naples, the state supreme court held that:

• A) the Naples should be awarded the full amount necessary to restore them to the position they would have been in had the contract been properly performed
• B) the Naples need not be awarded the full amount necessary to restore them to the position they would have been in had the contract been properly performed
• C) the Naples should be awarded the half the amount necessary to restore them to the position they would have been in had the contract been properly performed
• D) the Naples should be awarded 20% of the full amount necessary to restore them to the position they would have been in had the contract been properly performed
• E) none of the other choices are correct

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Definitions:

Net Present Value

A calculation that compares the value of a dollar today to the value of that same dollar in the future, taking inflation and returns into account; used in capital budgeting to analyze the profitability of an investment or project.

Forward Exchange Rate

The exchange rate at which two parties agree to exchange currencies at a future date.

Forward Trade

A non-standardized contract between two parties to buy or sell an asset at a specified future date for a price that is agreed upon today.

Spot Exchange Rate

The current price for exchanging one currency for another for immediate delivery, reflecting the value of one currency in terms of another at a specific moment in time.