USE THIS FACT PATTERN IN THIS AND THE NEXT QUESTION: You are a student in a University Business Program. You and two classmates, Rahvie and Patricia, have all developed an idea for a new energy drink specifically marketed towards helping university and college students get through exams easier. You have decided to collaborate by setting up a business in which you each own one-third controlling interest, and you have tentatively named your new product "STUDYBOOSTER". One of your company's customers recently ordered 10,000 cans of STUDYBOOSTER. After only 1,000 cans were made, the customer sends an urgent email cancelling the rest of the order that you received right away. Rahvie says that the company should sue the customer for the entire order of drinks, which would have been $275,000. Patricia says that while she would like to do that, she thinks that the company should just ask for $20,000, which was the cost of the 1,000 drinks manufactured, and the lost profit of $100,000. Who is right? Or are they both wrong? Please provide a clear analysis along with your answer.
USE THIS FACT PATTERN IN THIS AND THE NEXT QUESTION: You are a student in a University Business Program. You and two classmates, Rahvie and Patricia, have all developed an idea for a new energy drink specifically marketed towards helping university and college students get through exams easier. You have decided to collaborate by setting up a business in which you each own one-third controlling interest, and you have tentatively named your new product "STUDYBOOSTER". One of your company's customers recently ordered 10,000 cans of STUDYBOOSTER. After only 1,000 cans were made, the customer sends an urgent email cancelling the rest of the order that you received right away. Rahvie says that the company should sue the customer for the entire order of drinks, which would have been $275,000. Patricia says that while she would like to do that, she thinks that the company should just ask for $20,000, which was the cost of the 1,000 drinks manufactured, and the lost profit of $100,000. Who is right? Or are they both wrong? Please provide a clear analysis along with your answer.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:USE THIS FACT PATTERN IN THIS AND THE NEXT QUESTION: You are a student in a University Business
Program. You and two classmates, Rahvie and Patricia, have all developed an idea for a new energy
drink specifically marketed towards helping university and college students get through exams easier.
You have decided to collaborate by setting up a business in which you each own one-third controlling
interest, and you have tentatively named your new product "STUDYBOOSTER".
One of your company's customers recently ordered 10,000 cans of STUDYBOOSTER. After only
1,000 cans were made, the customer sends an urgent email cancelling the rest of the order that you
received right away. Rahvie says that the company should sue the customer for the entire order of
drinks, which would have been $275,000. Patricia says that while she would like to do that, she
thinks that the company should just ask for $20,000, which was the cost of the 1,000 drinks
manufactured, and the lost profit of $100,000. Who is right? Or are they both wrong? Please
provide a clear analysis along with your answer.
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