In the Carter V

question 29

Multiple Choice

In the Carter v. Tokai Financial Services, Inc. case, the agreement was found to:

• A) fit within the definition of a secured transaction.
• B) be governed by UCC Article 9.
• C) be for an initial term of five years, which ARC had an option to renew for nominal consideration.
• D) be a true finance lease.

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Definitions:

Contribution Margin

The difference between sales revenue and the variable costs associated with the production or sale of products or services. It's used to determine the ability of a business to cover its fixed costs.

Margin of Safety

This financial ratio measures the difference between actual or expected sales and the break-even point, indicating the cushion a company has before it incurs a loss.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behavior are valid.

High-low Method

A way to estimate the cost-behavior formula that uses the highest and lowest levels of activity to determine fixed and variable costs.