Inga Runs a Swedish Health Spa in Connecticut

question 52

Multiple Choice

Inga runs a Swedish health spa in Connecticut. She orders 100 loofah sponges from a company in California. They are sent "F.O.B. Hartford, Connecticut," but they never arrive. What consequence?

• A) Inga has to pay anyway since it was a destination contract.
• B) The California company is required to bear the loss since the sponges had not yet reached the F.O.B. point.
• C) The California company and Inga will have to split the loss since they did not specify in their contract when the risk of loss would pass to Inga.
• D) It cannot be determined who has the risk of loss from the information given.

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Definitions:

Accounts Receivable

Outstanding payments owed to a company by patrons for items or assistance already provided but not yet remunerated.

Debt To Suppliers

Liabilities owed to suppliers from transactions where goods or services were purchased on credit.

Showroom Expansion

involves the physical growth or enhancement of a retail space used to display products for sale, intended to increase customer engagement and sales.

After-Tax Maintenance Cost

The expense associated with maintaining an asset or investment after accounting for the effects of income taxes.