Sally's Sweet Fruits Contracts with Fruits to You,Inc

question 13

Multiple Choice

Sally's Sweet Fruits contracts with Fruits to You,Inc.for a delivery of two hundred pounds of strawberries to be delivered by Keep Kool Trucking,a trucking company with refrigerated trucks.On the day of delivery,the refrigeration units on Keep Kool's trucks are not working.Fruits to You

• A)may ship the goods to Sally's using another trucking company with refrigerated trucks.
• B)must refund Sally's money and cancel the contract.
• C)must wait to ship the strawberries until Keep Kool has fixed its trucks.
• D)must ship the goods through a different carrier and pay Sally incidental damages.

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Definitions:

Incremental Interest Rate

The additional interest rate applied to borrowing beyond a predetermined threshold, or the rate used to evaluate the cost of potential projects over the cost of capital.

Present Value

The valuation of an expected income stream determined by discounting the future income to its value in today's dollars.

Interest Expense

This is the cost incurred by an entity for borrowed funds, and it is typically reported on the income statement as a non-operating expense.

Premium Account

An account credited with the amount by which a security is issued above its par value, featuring benefits or terms superior to those of standard accounts.