Albert Has a Contract to Buy 100 Tables from Bartholomew

question 22

True/False

Albert has a contract to buy 100 tables from Bartholomew at a price of $50 a table. Five days before Bartholomew is to deliver the tables, he calls Albert to say that he is sorry but $50 won't cover his costs, and he will now need at least $75 a table. Albert agrees, because he needs the tables for his special sale. The modified contract is enforceable even though Albert isn't getting any new consideration, so long as Bartholomew is acting in good faith and the agreement to the new price is put in writing.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, typically reported on the income statement.

Profit Margin

A financial metric indicating the percentage of revenue that remains as profit after all expenses are deducted.

Income Tax Rate

The percentage at which an individual or corporation is taxed on their income.

Net Income

Net Income is the total profit of a company after all expenses have been deducted from revenues.