Mineral Resource Company Contracts to Provide Several Manufacturers with Tin

question 1

Multiple Choice

Mineral Resource Company contracts to provide several manufacturers with tin.When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts,the distributor

• A)can substitute some other material for the tin.
• B)is excused from the performance of its contracts.
• C)is liable for breach of contract.
• D)must still supply the tin needs of its customers.

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Definitions:

Capital Budgeting

The process of planning and managing a company's long-term investments in major projects or assets.

Discount Rate

The interest rate that discounted cash flow analysis relies on to calculate the current worth of prospective cash flows.

Cash Inflows

The money received by a business from its operational, investment, and financing activities.

Profitability Index

A financial measure that assesses an investment's attractiveness, determined by dividing the present value of future cash flows by the initial investment amount.