A Business Received an Offer from an Exporter for 30,000

question 15

Multiple Choice

A business received an offer from an exporter for 30,000 units of product at $16 per unit. The acceptance of the offer will not affect normal production or domestic sales prices. The following data are available: What is the amount of the gain or loss from acceptance of the offer?

• A) $30,000 loss
• B) $40,000 gain
• C) $150,000 gain
• D) $50,000 gain

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Definitions:

Par

This term typically refers to a financial instrument's nominal or face value, as opposed to its market value or price.

Negative Covenant

A clause in a contract that prohibits a borrower from taking certain actions, intended to protect the interests of the lender by maintaining the borrower's financial stability.

Current Ratio

A financial ratio indicating the capacity of a firm to cover its short-term liabilities with its current assets.

Loan Collateral

Assets a borrower offers to a lender as security for a loan, which can be seized if the loan is not repaid.