Which of the Following Characterizes an Output Contract

question 62

Multiple Choice

Which of the following characterizes an output contract?

• A)The buyer must accept whatever amount the seller produces,no matter how large.
• B)The buyer must accept a reasonable amount from the seller,but no more.
• C)The buyer must accept any amount that is reasonably proportionate to any stated estimate in the contract.
• D)The buyer must accept a conscionable amount from the seller,but no more.

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Definitions:

CCA Tax Shield

A deduction that Canadian businesses can claim for the depreciation of tangible property, reducing taxable income.

After-Tax Annual Lease Payment

The amount of lease payments due each year after accounting for the tax effects.

After-Tax Discount Rate

The discount rate after adjusting for taxes, used to evaluate investments and their future cash flows after tax implications.

After-Tax Lease Payment

After-tax lease payment refers to the lease expense remaining after deducting taxation benefits associated with the lease, illustrating the net cost of leasing to the lessee.