If an Oral Agreement Is Made to Be Performed Within

question 16

True/False

If an oral agreement is made to be performed within one year and if there is even a slight chance of carrying out the agreement completely within one year, the oral agreement would be enforceable.

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Definitions:

Cost of Capital

The rate of return that a company must earn on its project investments to maintain its market value and attract funds.

Debt/Equity Ratio

A fiscal ratio that reflects the comparative amount of equity from shareholders and borrowed funds utilized to support a company's resources.

DFL

Degree of Financial Leverage, a ratio that measures the sensitivity of a company’s earnings per share to fluctuations in its operating income, based on its capital structure.

EBIT

Earnings Before Interest and Taxes, a measure of a firm's profit that includes all incomes and expenses except interest and income tax expenses.