Fact Pattern 2-A1 (Questions A14-A16 Apply)

question 7

Multiple Choice

Fact Pattern 2-A1 (Questions A14-A16 apply)
Java Cafes,Inc.,and Kaffe Import Corporation dispute a term in their contract.
-Refer to Fact Pattern 2-A1.The least expensive method to resolve the dis?pute between Java and Kaffe may be

• A)arbitration because the case will be heard by a mini-jury.
• B)litigation because each party will pay its own legal fees.
• C)mediation because the dispute will be resolved by a non-expert.
• D)negotiation because no third parties are needed.

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Definitions:

Variable Cost

consists of costs that vary with the level of output, such as materials and labor costs, different from fixed costs.

NPV

Net Present Value; a financial metric used to assess the profitability of an investment by calculating the difference between the present value of cash inflows and outflows associated with the investment.

Default Chance

The probability that a borrower will fail to meet the obligations of a loan or debt.

Monthly Interest Rate

The percentage of a sum of money charged for its use per month, often used in reference to loans or credit balances.