Bert's Refuse has decided to add salvage to its business services and has offered its client, McCloud Metalworking, the following deal: Bert's will deduct the amount it receives for selling McCloud's scrap metal over the next year from the cost of refuse removal for McCloud. McCloud will pay an estimated monthly bill and, at the end of the year, Bert's will adjust the bill to reflect the true profit from its salvage of McCloud's scrap.

Which of the following, if it occurred, would constitute a disadvantage for McCloud of the plan described above?

[a]Bert's Refuse makes the same deal with another metalworking firm

A steady decrease in the price for savaged scrap metal over the year that the deal is in effect

[c]McCloud receives orders for goods which generate more scrap metal than usual

[d]An increase in demand for McCloud's goods

[e]Bert's Refuse decides to salvage other materials which McCloud's does not generate as scrap


OA B

Source: Princeton Review