Xavier Enters into a Contract to Operate a Yummy Yogurt

question 3

Multiple Choice

Xavier enters into a contract to operate a Yummy Yogurt franchise, which Yummy agrees to support as long as Xavier maintains his business license. Yummy's duty to perform is

• A) absolute.
• B) conditional.
• C) licentious.
• D) operational.

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Definitions:

Leverage Ratio

A financial measurement that compares the amount of a company's debt to its assets, equity, or earnings.

Interest-Burden Ratio

A financial ratio indicating the proportion of profits remaining after paying interest expenses, used to measure a company's ability to manage its interest obligations.

Profit Margin

A financial ratio indicating the percentage of revenue that exceeds the cost of goods sold, representing the proportion of each dollar of revenue that constitutes net profit.

ROA

Return on Assets, a financial ratio indicating how profitable a company is relative to its total assets.