Restful Inn Motel Corporation Wants to Terminate Its Franchise Arrangement

question 63

Multiple Choice

Restful Inn Motel Corporation wants to terminate its franchise arrangement with Steve's Cabins. Their contract does not provide for notice of termination or set a time for winding up the business. This means that to wind up, Steve's

• A) ​has a reasonable time, with notice.
• B) ​has whatever time Restful Inn determines, with or without notice.
• C) is entitled to notice, but nothing more.​
• D) ​must close immediately.

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Definitions:

Fixed Costs

Expenses that do not change with the level of goods or services produced over the short term.

Sales Ratio

A metric that compares a particular figure or cost to the total sales, providing insight into various financial aspects of a business.

Variable Costs

Expenditures that fluctuate based on the volume of output or services provided by an enterprise.

Break-Even Point

The point at which total costs and total revenue are equal, leading to neither profit nor loss.