Hal Promises Not to Foreclose on a Mortgage That He

question 37

Multiple Choice

Hal promises not to foreclose on a mortgage that he holds on an office complex that Christopher owns.In reliance on this promise,Christopher spends $200,000 to remodel the complex.Which of the following is correct with regard to Hal's promise?

• A)Hal's promise not to foreclose is unsupported by consideration.
• B)Hal's promise is noncontractual.
• C)Hal's promise may be enforced against him based upon the doctrine of promissory estoppel.
• D)All of the above.

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Definitions:

Monthly Fixed Expense

Expenses that do not vary with production volume or business activity level, incurred on a monthly basis.

CM Ratio

Contribution margin ratio, showing the portion of sales revenue that is not consumed by variable costs and contributes to covering fixed costs.

Fixed Expenses

Costs that do not fluctuate with the level of production or sales, such as rent, salaries, and insurance premiums.

Units

A measure of quantity for items that are being produced, sold, or inventoried by a company.