When Goods Are Shipped COD

question 2

Multiple Choice

When goods are shipped COD:

• A) the buyer always has the right to examine them before making payment.
• B) the underlying contract must specify when the buyer may inspect the goods.
• C) the buyer has no right to examine the goods until payment is made.
• D) the buyer gives up all rights to inspection of the goods.

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Definitions:

Opportunity Loss

The cost of the next best alternative foregone as a result of making a decision.

Actual Profit

The realised gain from business operations or investments, after all costs and expenses have been deducted.

Payoff Table

A tabular representation of the possible outcomes or payoffs in a decision-making problem, against various decisions under different states of nature.

State of Nature

In decision making and statistics, the actual but unknown condition affecting outcomes or probabilities.