The Costs Under an Onerous Contract Are Measured Using Which

question 3

Multiple Choice

The costs under an onerous contract are measured using which valuation method?

• A) the lower of cost or net market value;
• B) the lower of the cost of fulfilling the contract and the penalties arising from failure to fulfil the contract;
• C) the present value method using a risk-free discount rate;
• D) the unavoidable costs of meeting the obligations discounted by reference to market yields at reporting date.

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Definitions:

Unpleasant Event

An occurrence that is not enjoyable or satisfying, often causing discomfort or distress.

Primary Reinforcer

A naturally reinforcing item or factor, such as food or water, that does not require learning to be effective in increasing the likelihood of a response.

Secondary Reinforcer

A stimulus that becomes reinforcing through its association with a primary reinforcer; also known as a conditioned reinforcer.

Positive Reinforcement

A technique in behavior management that increases the probability of a desired behavior by presenting a pleasant stimulus after the behavior occurs.