Toy Tech (TT)has Ordered 50,000 Aluminum Widgets from the Acme

question 62

Multiple Choice

Toy Tech (TT) has ordered 50,000 aluminum widgets from the Acme Widget Corporation (AWC) with delivery to be made on November 1.These widgets will be used in TT products to create toys for the holiday season.Under which circumstance may TT claim that AWC has made an anticipatory repudiation of the contract?

• A) The cost of aluminum has risen, lowering AWC's profit margin, yet AWC insists that it will honor the contract.
• B) The demand for widgets has suddenly decreased, and TT isn't sure it can sell the 50,000 widgets it ordered.
• C) AWC's sole manufacturing plant burned down on October 1, yet AWC insists that it will rebuild and honor the contract.
• D) TT has found another manufacturer that can provide less expensive widgets of the same quality as AWC's widgets.

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Definitions:

Net Cash Flow

The difference between a company's cash inflows and outflows over a period of time.

Taxable Income

Taxable income is the portion of an individual's or corporation's income used to determine how much tax they owe to the government in a specific period.

Operating Costs

Expenses associated with the day-to-day functioning of a business, excluding financing costs and taxes.

Income Tax Rate

The income tax rate is the percentage at which individual or corporate income is taxed by the government.