Applied Methods Corporation Promises to Give Stock Options to Belden,a

question 32

Multiple Choice

Applied Methods Corporation promises to give stock options to Belden,a production designer,for processes he has already designed. This promise is

• A)enforceable because it is a new contract.
• B)enforceable because it is an illusory promise.
• C)enforceable because it is supported by past consideration.
• D)unenforceable.

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Definitions:

Total Current Assets

The sum of all assets likely to be converted into cash within a year, including cash, marketable securities, accounts receivable, and inventory.

Total Current Liabilities

These are obligations that a company is required to pay within one year or within the normal operating cycle.

Working Capital

The variance between a business's immediate assets and its short-term obligations, signalling its ability to meet short-term debts.

Current Ratio

A financial liquidity ratio that compares a company's current assets to its current liabilities.