Fact Pattern 2-1

question 15

Multiple Choice

Fact Pattern 2-1
Java Cafes, Inc., and Kaffe Import Corporation dispute a term in their contract.


-Refer to Fact Pattern 2-1.Resolving the dispute between Java and Kaffe by having a neutral third party render a binding decision is one of the advantages of

• A)arbitration.
• B)conciliation.
• C)intervention.
• D)mediation.

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Definitions:

Present Value

Present Value is the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Cash Inflows

Money or other forms of financial assets that come into a company, usually from operations, investments, or financing activities.

Required Rate

The minimum return or yield that investors seek when investing in a security, often influenced by the risk associated with the investment.

Internal Rate of Return

A financial metric used to evaluate the profitability of an investment, indicating the annual return that makes the net present value of all cash flows equal to zero.