Sally Has Just Purchased a Home and Wants to Have

question 8

Multiple Choice

Sally has just purchased a home and wants to have an in-ground pool installed.She calls Cool Pools,the company that put in her neighbors' pools.When the company rep comes to her property,he does some soil tests that are standard for the industry and gets the same results as he got when the other pools were put in,so the company gives her a price quote of $16,000.When Cool Pools begins excavating,it discovers solid rock four feet below ground level.The neighbors had no such rock.Cool Pools stops work and informs Sally that it will have to use explosives to remove the rock and the cost of the pool will now be $32,000.

• A) Sally is under contract and will have to pay the new price.
• B) Sally can have the contract discharged based on impracticability.
• C) Sally can have the contract discharged based on impossibility.
• D) Sally can have the contract discharged based on frustration of purpose.

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Definitions:

Reportable

Pertains to events, transactions, or details that must be disclosed in official documents or reports according to regulations or standards.

Minimum Revenue

The lowest amount of revenue that a business must generate to cover its operating expenses and avoid losses.

Operating Segment

A distinct component of a business engaged in activities generating revenues and incurring expenses, whose results are regularly reviewed by the entity's chief operating decision maker.

Revenue Test

A criterion used to evaluate whether an entity's revenue level meets specific thresholds for financial reporting or regulatory compliance purposes.