Which Product Would Be Defective Under Strict Products Liability

question 29

Multiple Choice

Which product would be defective under strict products liability?

• A) 150 proof vodka that causes intoxication and liver damage after years of use.
• B) Cigarettes that causes cancer and heart disease after some years of use.
• C) Coffee that is served hot enough to cause burns.
• D) An electric stove that, when the oven door is opened, gives a serious electrical shock.
• E) A dog that bites very readily.

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Definitions:

Net Present Value (NPV)

A profitability measure for an investment that involves deducting the present value of cash expenditures from the present value of cash receipts throughout a certain timeframe.

Cash Flows

The total amount of money being transferred into and out of a business, affecting its liquidity.

Accrual Accounting

An accounting method that records revenues and expenses when they are incurred, regardless of when cash transactions occur.

Discounted Cash Flow Analysis

A financial model used to estimate the value of an investment based on its expected future cash flows, adjusted for the time value of money.