Which of the following is the best definition of transactions exposure?

A) A plot showing the gains and losses that will occur on a contract as the result of unexpected price changes.
B) An option that gives the owner the right, but not the obligation, to sell an asset.
C) A plot showing how the value of the firm is affected by changes in prices or rates.
D) An agreement by two parties to exchange, or swap, specified cash flows at specified intervals in the future.
E) Short-run financial risk arising from the need to buy or sell at uncertain prices or rates in the near future.

Compared to people earning $150,000 a year,people earning $300,000 pay _________ Social Security taxes.

A) less
B) the same
C) slightly more
D) twice as much

Arthur and Brian have entered into a contract with an enforceable liquidated damages provision that states that Ben's recovery will be $10,000 in the event of Arthur's breach.Arthur breaches the contract.Ben loses $50,000 in consequential damages as a result.Ben's recovery is limited to $10,000.

Where a creditor is financing the inventories of a manufacturer of life preservers, the most sensible security for all involved is a floating charge.

The U.S.Sarbanes-Oxley Act:

A) has no impact on the supply management process.
B) affects internal accounting procedures of privately-held companies.
C) requires the Chief Purchasing Officer to sign off on every contract.
D) requires listing off-balance sheet items such as long-term purchase agreements.
E) requires supply management to report directly to the Chief Financial Officer.

Refer to Exhibit 8-2.If Walters pays for the purchase on March 31, 2010, what amount is recorded in the purchase discounts lost account?

A) $ 0
B) $ 2, 800
C) $14, 000
D) $28, 000