Rita,the Manager of the State University (SU) Soccer Team,orally Agrees

question 60

Multiple Choice

Rita,the manager of the State University (SU) soccer team,orally agrees to lease a certain number of specially made SU banners from Top Banners,Inc.This lease is enforceable only if Top has made a substan-tial start on making the banners and

• A)Rita agreed to the lease on behalf of the SU soccer team.
• B)SU does not have other,similar banners available.
• C)the banners are not suitable for others in the course of Top's business.
• D)the soccer season has not ended and SU goes to the finals.

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Definitions:

Debt/Equity Ratio

An indicator that measures the balance between shareholders' equity and debt in financing a company's assets, often used in examining the firm's financial leverage.

Cost of Equity

The return a company must offer investors to compensate for the risk of investing in its equity.

After-Tax Cash Flows

The net cash inflow or outflow after taking into account the effects of taxation.

After-Tax Cost

The expense of a transaction or investment after taking into account the effects of taxes.