Mineral Resource Company Contracts to Provide Several Manufacturers with Tin

question 1

Multiple Choice

Mineral Resource Company contracts to provide several manufacturers with tin.When a cartel of tin-producing countries suddenly embargoes future shipments of tin to Mineral Resource so that it cannot fulfill its contracts,the distributor

• A)can substitute some other material for the tin.
• B)is excused from the performance of its contracts.
• C)is liable for breach of contract.
• D)must still supply the tin needs of its customers.

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Definitions:

Transfer of Ownership

The act of passing the legal title of an asset from one entity or individual to another.

Economic Life

The estimated period over which an asset is expected to be economically useful to the owner.

Sales-Type Lease

A lease agreement where the lessor recognizes profit or loss upfront due to the difference between the fair value of the asset and its carrying amount.