If the Adoption of a New Product Will Reduce the Sales

question 82

Multiple Choice

If the adoption of a new product will reduce the sales of an existing product,then the project cash flows should:

• A) reflect only the sales of the new product.
• B) include only the reduction amount.
• C) be reduced by the cash that would have been generated by those sales.
• D) be adjusted upward by the reduction amount.

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Definitions:

Contract Rescission

The legal act of canceling a contract and returning the parties involved to their positions before the contract was signed.

Mistake Of Value

A legal concept referring to an error made by one or both parties at the time of contract formation, concerning the value of the goods or services to be exchanged.

European Courts

Judicial institutions operating within Europe, including both national courts of individual sovereign countries and transnational courts such as the European Court of Justice.

Promissory Estoppel

A legal principle that prevents a party from withdrawing a promise made to another, when the latter has reasonably relied on that promise to their detriment.