If the Promisee Entered into the Contract in Order to Discharge

question 20

Multiple Choice

If the promisee entered into the contract in order to discharge a duty he or she owed the third party,then the third party is a(n) __________ beneficiary.

• A) express
• B) implied
• C) creditor
• D) donee

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Definitions:

Operating Income

Earnings before interest and taxes (EBIT), an indicator of a company’s profitability from its core business operations.

Fixed Overhead

Costs that do not change with the level of output, including rent, salaries, and insurance premiums.

Administrative Costs

Expenses that are not directly tied to production or sales, such as office expenses, salaries of administrative personnel, and legal fees.

Incremental Income

The additional income that is generated as a result of a specific business decision or activity.