The Primary Difference Between a "Warranty" and a "Guarantee" Is

question 14

Multiple Choice

The primary difference between a "warranty" and a "guarantee" is that

• A)a warranty is in writing;whereas,a guarantee is only a verbal agreement.
• B)a warranty is a legal agreement;whereas,a guarantee is a non-enforceable understanding between a buyer and seller.
• C)a warranty lasts longer than a guarantee.
• D)there is no difference between a warranty and a guarantee.

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Definitions:

Market Value

The price in the market at which assets or services can currently be exchanged.

Investment's Cost

The total amount of money spent to acquire an investment, including all charges and fees associated with the purchase.

Average Accounting Return Rule

A capital budgeting criterion that measures the profitability of an investment as the average net income divided by the average book value.

Profitability Index Rule

A capital budgeting technique used to decide whether to invest in a project, calculated as the present value of future cash flows divided by the initial investment cost.