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Evan Borrowed $100 000 from Joanna

question 26

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Evan borrowed $100 000 from Joanna.As security for the repayment of that debt,he created a mortgage over Blackacre.Blackacre consists of a piece of land and a house.Explain why is it important to both parties that Blackacre is protected by insurance.


Definitions:

Inventory

A company's stock of goods or materials, which are held for the purpose of resale or in the production process.

Loan

A sum of money that is borrowed, which must be paid back with interest.

Cash Flows

The total amount of money being transferred into and out of a business, affecting the organization's liquidity, financial health, and operational capabilities.

Marketable Securities

Financial assets that can be quickly converted into cash at a known price.

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