In Relation to the Order of Priority of Payment of Debts

question 21

Multiple Choice

In relation to the order of priority of payment of debts upon liquidation, which statement is correct?

• A) Ordinary unsecured creditors are paid before preferential unsecured creditors.
• B) Preferential unsecured creditors are paid before deferred creditors.
• C) Deferred creditors are paid before ordinary unsecured creditors.
• D) Deferred creditors are paid before secured creditors.

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Definitions:

Annuity

An economic scheme that delivers a constant payment stream to a recipient, predominantly utilized in preparing for retirement.

Payment Interval

The frequency with which a recurring payment is made, such as monthly or annually.

Ordinary General Annuity

An annuity where payments are made at the end of each period, such as monthly or annually, in contrast to at the beginning.

Future Value

The predicted amount of money that an investment will grow to at a specific date in the future, considering a certain rate of interest or growth.