Fact Pattern 22-1 Nelson, an Accountant, Enters into a Contract to Provide Services

question 33

Multiple Choice

Fact Pattern 22-1
Nelson, an accountant, enters into a contract to provide services to Operational Processes, Inc. (OPI) . Nelson does not finish the work within the contract's deadline. This causes OPI to fail to meet certain other deadlines owed to Prime Bank, which results in the firm's payment of penalties to the bank.
-Refer to Fact Pattern 22-1.OPI may be entitled to​

• A) ​payment from Nelson of the amount of the penalties in damages.
• B) ​specific performance of any future contract with Nelson.
• C) ​an injunction against future breaches of contract by Nelson.
• D) ​no damages or other relief because Nelson is not liable.

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Definitions:

Present Value Factors

Multipliers used to calculate the present value of a future amount of money or stream of cash flows.

Compound Interest

Interest calculated on the initial principal and also on the accumulated interest of previous periods.

Present Value Methods

Techniques used to determine the current worth of a future cash flow, stream of cash flows, or an investment, by discounting them at a specific rate.

Net Present Value

A financial metric that calculates the value of a project or investment in terms of its present value of net cash inflows minus the present value of its costs.