Jill Promises to Pay Kyle $500 Because "He Does Not

question 13

Multiple Choice

Jill promises to pay Kyle $500 because "he does not have as much money as other people." Jill's promise is

• A) enforceable because society wants people to keep their promises.
• B) enforceable because the redistribution of wealth is a valid social goal.
• C) not enforceable because Jill could have given more.
• D) not enforceable because Kyle has not given consideration in return.

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Definitions:

Interest

The cost of borrowing money, often expressed as a percentage rate over a period of time, or the income earned from lending money.

Dividends

Money disbursed by a business to its members, principally originating from the enterprise's earnings.

Financial Intermediary

An institution that pools investors’ money and invests it on their behalf giving the investors shares of itself. Mutual funds are the primary example.

Indirect Method

A way of calculating cash flows from operations by starting with net income and adjusting for changes in non-cash accounts.