A Balloon Payment

question 4

Multiple Choice

A balloon payment

• A) is an upfront payment to obtain a loan.
• B) is due when a loan comes due.
• C) may be due at any time during the term of a loan.
• D) is used to lift (remove) a loan covenant.

---

Definitions:

Divestiture

The process of selling an asset or subsidiary by a company to optimize its portfolio or raise funds.

Strategic Thinking

The process of planning for the future by analyzing current trends, making predictions, and devising plans to achieve long-term objectives.

Purchase Method

An accounting technique used to consolidate the financial statements of two companies when one company acquires another.

Total Assets

The sum of all assets owned by a company, including cash, investments, property, and equipment, representing the total resources available for use in its operations.