A 'Floating Charge' Is Security for a Loan to a Company

question 7

Multiple Choice

A 'floating charge' is security for a loan to a company that takes the form of a charge over:

• A)fixed, identified property.
• B)property covered by personal guarantees.
• C)a class of assets (or sometimes all) of the company.
• D)fixtures only.

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Definitions:

Capital Budgeting

The process of evaluating and selecting long-term investments that are in line with the corporation's goal of wealth maximization.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in a uniform manner.

Capital Budgeting

A procedure for examining and picking long-term investment opportunities that match the goal of wealth maximization for the firm.

Straight-Line Depreciation

A method of allocating the cost of a tangible asset over its useful life in equal annual amounts, resulting in a constant annual charge.