The Big Book Store Just Received a Shipment of 100

question 10

Multiple Choice

The Big Book Store just received a shipment of 100 copies of Contemporary Business Law: Principles and Cases at wholesale price.The store contacted the local university to see if it was interested in purchasing the book.The bookstore faxed an offer of $5,000.00 for the 100 books.Due to a poor quality fax transmission the last three zeros were not visible.Upon receiving the offer it appeared that the 100 books were on sale for $500.The university accepted the offer,received the books and deposited $500.00 in the store's bank account.Upon receiving its bank statement,the store realized the error and decided to take action against the university.Will it succeed?

• A)Yes,the inadequacy of the consideration would render the transaction unenforceable because the court could not adequately determine the store's consideration due to error.
• B)No,the store has lost on the deal because offer and acceptance both took place.
• C)Neither side would be held to the contract because it would be ruled invalid.It will be renegotiated and the store will pay a penalty for breach of contract.
• D)No,the store cannot take action,but none of the above statements are true.
• E)Yes,the store can take action,but none of the above statements are true.

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Definitions:

Return on Stockholders' Equity

A measure of the profitability of a corporation in relation to the equity held by its shareholders, calculated as net income divided by shareholder equity.

Return on Total Assets

A measure of a company's profitability, indicating how effectively it uses its assets to generate earnings.

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations or those due within one year, calculated as current assets divided by current liabilities.

Accounts Payables

Liabilities representing amounts owed by a company to suppliers or creditors for goods and services received but not yet paid for.