Dondi Contracts to Buy a Custom Espresso Maker from Caffee

question 6

Multiple Choice

Dondi contracts to buy a custom espresso maker from Caffee Specialties,Inc.,for $4,500,but Caffee fails to deliver.Dondi buys the appliance else?where for $5,500.Dondi's measure of damages is

• A)$1,000.
• B)$1,000 plus incidental damages.
• C)incidental damages only.
• D)$0.

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Definitions:

Estimating Errors

Mistakes or inaccuracies in forecasting future values or costs, often leading to deviations from expected outcomes.

Unbiased Managers

Refers to managers who make decisions without prejudice or favoritism, aiming for fairness and objectivity in business operations.

Terminal Value

The estimated value of a business at the end of a specific period, considering all future cash flows discounted back to present value.

Detailed Forecast Period

An extended timeframe over which detailed predictions about a company's financial performance, including revenue and expenses, are made.