A Promise That Consists of an Indefinite, Open-Ended Statement Purporting

question 7

Multiple Choice

A promise that consists of an indefinite, open-ended statement purporting to be an agreement is known as a(n) :

• A) illusory promise.
• B) gratuitous promise.
• C) preexisting duty.
• D) barren promise.

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Definitions:

Minimum Required Rate

This is the lowest return that investors are willing to accept for investing in a project or security, often used in capital budgeting to assess potential investments.

Return On Investment

A measure used to evaluate the efficiency of an investment, calculated by dividing the net profit of the investment by its cost.

Operating Assets

Assets that are used for the day-to-day functioning of a business and are expected to generate economic benefits.

Residual Income

The amount of income that an individual or company retains after accounting for all operating expenses and costs, including debt.