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iren [92.7K]
3 years ago
9

Gerard, an adult, contracts with Communiserve to purchase, in installments over a period of five years, a very large quantity of

services that he will probably never need. Although Gerard understands what he is doing when he enters the contract, he has a mental condition that impairs his ability to act in a reasonable and rational way. Under the Restatement:a. Gerard’s contract is voidable at his option while it is entirely executory.b. Gerard cannot avoid the contract if Communiserve had no reason to suspect Gerard’s incompetency.c. Gerard cannot avoid the contract if the terms are fair.d. Gerard can only avoid the contract if the terms are grossly unfair.63. In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by:
Business
1 answer:
Ganezh [65]3 years ago
5 0

Answer:

a. Gerard’s contract is voidable at his option while it is entirely executory.

Explanation:

In the United States of America, one of the most widely used recognized and most cited legal treatises is the Restatement of Contracts. It allows legal luminaries (judges and lawyers) to have a general understanding of non-binding authorities in contract or common law.

According to the Restatement (second) of Contract, voidable contract is one where one or more parties have the power, by a manifestation of election to do so, to avoid the legal relations created by the contract, or by ratification of the contract to extinguish the power of avoidance.

Hence, under the Restatement, Gerard’s contract is voidable at his option while it is entirely executory.

63. In most states, whether the time within which a minor disaffirms a contract constitutes a reasonable time is determined by the fact and circumstance of the case.

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The concept of market efficiency underpins almost all financial theory and decision models. When financial markets are efficient
OverLord2011 [107]

Answer:

Equal to

Explanation:

Financial theory assumes that financial markets are efficient and that there is no information failure in conducting financial transactions. However, this is an assumption and there could, in some instances, be asymmetric information in the form of adverse selection and moral hazards. For example, if managers of a corporation know how well or how poorly their business is doing than stockholders (as organizational performance determines the price of a security), then there would be an information failure or informational inefficency. Also, a potential investor who cannot distinguish between a firm whose security has a high potential for profit and low risks compared to that with a low potential for profit and high risk will be willing to pay a price that lies between the value of stock from bad firms and the value of stock from good firms. This will not augur well for good firms as their stock is underpriced and they will be reluctant to sell.

When the financial market is efficient, investors of stock would be able to earn supernormal returns on their investments. It is therefore neccessary that the price of a corporation's common stock should be equal to the present value estimate of the firm's expected cash flows discounted by it appropriate rate of return.

6 0
3 years ago
Assume that you live in California and are on vacation, traveling by car from California to Texas. You are injured in a motel ro
nevsk [136]

Answer:

a. No.  A state court will do a better job in this case because it exercises unlimited jurisdiction.  Moreover, you can only bring your case to a federal court if the amount of your claim is up to $75,000 or the issue is exclusive to the federal court.  This is not the case here.

b. Yes and No.  We need some additional information about the accident location to help answer this question definitively.

c. No. You should not consider accepting the offered settlement.  The jury award is meant to pay for your medical bills and also to help you recover financially as though the accident did not happen in the first place.  Accepting any lesser amount after the judgment is rendered is in bad taste.  The other party should have negotiated to settle out of court before the final judgment was rendered.  But it did not.  So, go with the jury award.

Explanation:

a) Data and Calculations:

Missed work for 15 weeks

Total medical bills incurred = $50,000

Total lost wages incurred = $15,000

Jury award = $100,000 ($50,000 for medical, $15,000 for lost wages and $35,000 for punitive damages)

Settlement offer = $50,000

7 0
3 years ago
A firm’s profit margin is 5 percent, its debt/assets ratio is 56 percent, and its dividend payout ratio is 40 percent.
beks73 [17]

Answer:

The given statement is FALSE.

Explanation:

It will only be till sustainable growth rate that the firm will not require external financing. The debt /ratio demands resources to sustain the operation, which are not powered by the profit margin.

3 0
2 years ago
Terapin Company engages in the following external transactions for November. 1. Purchase equipment in exchange for cash of $23,4
uysha [10]

Answer:

Journal Entries

Journal 1 :

Equipment $23,400 (debit)

Cash $23,400 (credit)

Being Purchase of Equipment

Journal 2 :

Cash  $6,800 (debit)

Service Revenue  $6,800 (credit)

Being Service rendered for Cash

Journal 3 :

Salaries Expense $2,100  (debit)

Cash $2,100 (credit)

Being Salaries expense paid

Explanation:

Narrations have been provided to explain the transaction. Remember to use the account titles provided in accounting for the transactions.

8 0
3 years ago
You are considering two mutually exclusive projects. Project A costs $3.6 million, has a required return of 14.5 percent, and an
sp2606 [1]

Answer:

Neither

Explanation:

The internal rate of return is a capital budgeting method that is used to determine the profitability of a project.

Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested

The decision rule when using the internal rate of return is to undertake the project if the internal rate of return is greater than the required return of the project. If this is not met, the project should be rejected.

If choosing between multiple projects, the decision rule is to choose the projects with the highest internal rate of return. This is because that project would be the most profitable.

Neither of the project should be selected because the IRR of both projects is less than their required returns

3 0
2 years ago
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