Use This Fact Situation to Answer the Related Questions That

question 43

Multiple Choice

Use this fact situation to answer the related questions that follow. A is buying a video business including the inventory of DVDs,which is valued at half the worth of the business,but A only has half the purchase price,so B agrees to help A out.
In this case,to help A buy the business,B will

• A)take back a floating charge over the inventory.
• B)take a chattel lease over the inventory for the balance of the purchase price.
• C)take back a mortgage/charge on the inventory.
• D)take back a chattel mortgage on the inventory.
• E)none of the above

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Definitions:

Comparable Used Van

A used van that is similar in age, condition, mileage, and features to another van, typically used for benchmarking purposes.

Financially Better

A general term referring to an improved financial condition or status of an individual, company, or economy.

Constrained Resource

A limited resource that restricts a company's ability to produce goods, offer services, or achieve its objectives.

Contribution Margin

The difference between the sales revenue and variable costs of a product, showing how much revenue contributes towards covering fixed costs and generating profit.