Raw Material, Inc

question 7

Multiple Choice

Raw Material, Inc., and Sewn Fabric Corporation enter into a contract for a sale of muslin. The terms do not clearly indicate whether it is a destination or shipment contract. A court would most likely presume that it is

Definitions:

Accounting Break-even

The point at which total costs match total revenues, indicating that a business is neither making a profit nor a loss.

Net Present Value

The variance between the current worth of cash inflows and the current worth of cash outflows over a specific duration, employed to evaluate the profitability of an investment.

Discounted Payback Period

The length of time required for an investment’s discounted cash flows to equal its initial cost.

Accounting Basis

The method by which accounting transactions are recognized and recorded, such as cash basis or accrual basis accounting.