Collin contracts Cool Air Inc. to install ceiling fans for each apartment in a building that he owns. Collin requested that the work to be done in five days, but Cool Air Inc. took seven days to complete the work.

Which of the following statements is true in this scenario?

Collin and Cool Air Inc. must take this issue to arbitration.

Cool Air Inc. has completely performed under the contract and is entitled to full recovery.

Collin can refuse full payment to Cool Air Inc.

Cool Air Inc. is in material breach of contract.

Cool Air Inc. will receive a partial recovery under the contract.

Cool Air Inc. is in material breach of contract.

Explanation:

In this question, it is correct to say that the company Cool Air Inc. failed to fulfill the contractual obligation to finish the service in five days, as proposed by contractor Collin.

Therefore, when a breach of the contract occurs, such as failure to meet a deadline or a failure, the resolution of problems arising from the breach of the contract may include informal attempts, where the parties agree to recover the damage caused, but if it is informally ignored, there is legal possibility of filing a lawsuit.

7.7%

Explanation:

Given :

Risk free rate of return = 4%

Risk premium = 5%

Estimated beta = 0.7

Using the CAPM relation :

The expected return = Risk free rate + (Risk premium * Estimated Beta)

Expected Return = 4% + (5% * 0.74)

Expected Return = 4% + 3.7%

Expected Return = 7.7%