Refer to Fact Pattern 12-1

question 136

Multiple Choice

Refer to Fact Pattern 12-1. After Gena defaults on her loan, Fidelity should be able to seize which property to help settle the debt?

• A) Gena's prized family-heirloom vase collection
• B) all of Gena's furniture
• C) any automobile Gena owns
• D) Gena's home
• E) all of the other choices

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Definitions:

Discount Factor

A number used to calculate the present value of future cash flows; it reflects the time value of money.

Operating Costs

Expenses involved in the day-to-day functions of a business related to its operations, potentially including both cost of goods sold and operating expenses.

Salvage Value

The estimated resell value of an asset at the end of its useful life.

Discount Rate

The interest rate used to discount future cash flows to their present value, often in the context of investment appraisal or determining the net present value.