Which of the Following Is Most True Regarding Noncompetition Clauses

question 52

Multiple Choice

Which of the following is most true regarding noncompetition clauses in contracts?

• A) Such clauses are not used during employment contracts.
• B) If they have a legitimate business purpose,such clauses will be enforced.
• C) Such clauses are enforced only for protecting the environment and conserving resources.
• D) Such clauses help in promoting free trade.

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Definitions:

Present Value

The present worth of a sum of money or cash flows expected in the future, based on a certain rate of return.

Cash Flow

The combined value of financial transactions into and out of an enterprise, crucially affecting its cash reserves.

Present Value

is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Discount Rate

The rate of interest utilized to calculate the current value of future cash flows in a discounted cash flow assessment.