Rachel Owned the Right to Mine for Gold on a Particular

question 48

Essay

Rachel owned the right to mine for gold on a particular piece of property.Because she lacked immediate financial resources,she issued a statement that was designed to attract investors.That statement was,as Rachel knew,false.It claimed that the land held considerably more gold than it actually did.Relying upon the truth of the information contained in Rachel's statement,Siddharth invested $100 000 in her mining project.On the basis of the statement,he expected to earn a net profit of $250 000.In fact,he earned a much more modest profit of $10 000.Siddharth has sued Rachel for the tort of deceit.If he succeeds,how much will he receive as compensatory damages? Explain your answer.

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Definitions:

Cash Inflows

The total amount of money being transferred into a business, often from operations, financing, or investing activities; critical for assessing a company's liquidity and financial health.

Investment Projects

Initiatives or activities undertaken by an entity to invest capital with the aim of generating revenue or appreciating in value.

Internal Rate of Return

The discount rate at which the net present value of all cash flows from a particular project equals zero.

Increased Efficiency

Improvements in operational performance that allow for the same or higher levels of output with less input, often through better processes or technology.