Twenty Years After You Take This Class You Are Successful

question 170

Multiple Choice

Twenty years after you take this class you are successful and wealthy. Knowing that this class was the key to your success, you look up your old professor and send a letter saying, "Because you helped me so much, I am going to send you a check for $100,000." Later you come to your senses and do not send the check. Your old professor sues you for the money:

• A) you have to pay; there is a valid contract
• B) you do not have to pay; the professor did not send a timely letter of acceptance
• C) you do not have to pay; there is a lack of consideration
• D) you do not have to pay; promissory estoppel applies
• E) you do not have to pay; you were legally insane

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Definitions:

Bond Discount

The difference between the face value of a bond and its selling price when the bond is sold for less than its face value.

Impairment Loss

The amount by which the carrying value of an asset exceeds its recoverable amount, leading to a reduction in the asset's value on the balance sheet.

Realized Profit

Earnings that are generated and recorded when assets are sold for a price higher than their purchase cost.

Intercompany Sale

Transactions that occur between two entities within the same corporate group, which are eliminated during consolidation to avoid double-counting in financial statements.