List and Explain Five Things About Your Life Which Would

question 10

Essay

List and explain five things about your life which would be drastically different if the law of contract could not be used to enforce promises.

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Definitions:

LIFO

The last-in, first-out accounting method of valuing inventories.

Economic Earnings

The real flow of cash that a firm could pay out without impairing its productive capacity.

Liquidity Ratio

A financial metric used to determine a company's ability to pay off its short-term debts with its current assets.

Current Ratio

Current assets/current liabilities. Measures the ability of the firm to pay off its current liabilities by liquidating current assets.