Which of the Following Is an Example of an Appropriate

question 84

Multiple Choice

Which of the following is an example of an appropriate loan covenant?

• A) The firm must increase its debt ratio by at least 10 percent.
• B) The firm must reduce its total asset turnover by 10 percent.
• C) The firm must purchase an insurance policy on a key employee.
• D) All of the options are examples of an appropriate loan covenant.

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Definitions:

Implied Warranty

An unwritten guarantee that a product will meet a certain level of quality and reliability, even if not expressly stated.

Implied Warranty

A legal doctrine that automatically provides certain guarantees from the seller to the buyer, suggesting that the product or service is fit for its intended purpose.

UCC Section

a specific provision or part of the Uniform Commercial Code, which is a set of laws that provide legal rules and regulations governing commercial or business dealings and transactions in the United States.

Express Warranty

A seller's promise or guarantee that a product will meet a certain level of quality and reliability, explicitly stated in a contract or by implication through advertising.