Blue Bank Agreed to Give Clarice an Operating Line of Credit.Clarice

question 54

True/False

Blue Bank agreed to give Clarice an operating line of credit.Clarice gave Blue Bank a security interest in all the present and future assets of her home renovation business which she carries on in Thunder Bay, Ontario, to secure her obligations under the line of credit.The security agreement says nothing about Clarice's right to sell her assets.The bank has registered its security interest under the Ontario Personal Property Security Act.Clarice can sell any of her assets without the consent of the bank.

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Definitions:

Internal Rate

Typically refers to the Internal Rate of Return (IRR), a financial metric used to estimate the profitability of potential investments.

Payback Period

The length of time it takes for an investment to generate enough cash flow to recover its initial cost.

Salvage Value

The expected remaining valuation of an asset after its service life has ended.

Straight-Line Method

A method of allocating the cost of a tangible asset over its useful life in equal annual installments.