John Buys a Machine for $10,000 Under a Contract That

question 63

Multiple Choice

John buys a machine for $10,000 under a contract that excludes consequential damages and limits the buyer's remedies to repair and replacement of defective parts.John later discovers that the machine is not working properly.Under these circumstances if the remedy of limitation is enforceable,then,to what extent will John be successful?

• A) John can recover $10,000.
• B) John will have to pay an additional amount for any repairing done.
• C) John is entitled to any damages since he did not check the machine on purchase.
• D) John can only get the machined replaced or repaired by the seller.

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Definitions:

Accounts Receivable Turnover

A financial ratio measuring how many times a company collects its average accounts receivable balance within a certain period.

Average Accounts Receivable

An accounting metric that represents the average amount of money owed to a company by its customers over a specific time period.

Net Sales

The amount of sales generated by a company after deductions for returns, allowances for damaged or missing goods, and discounts.

Dividend Yield Ratio

A financial ratio that indicates how much a company pays out in dividends each year relative to its share price.