Which of the Following Is True Regarding Priority in Rights

question 21

Multiple Choice

Which of the following is true regarding priority in rights to the computer?

• A) The bank had priority because the computer was considered after-acquired property properly covered by the initial security interest.
• B) XYZ Electronics had priority because XYZ Electronics had a purchase-money security interest in the computer.
• C) XYZ Electronics had priority only if XYZ Electronics perfected its security interest within 10 days of the purchase.
• D) XYZ Electronics had priority only if XYZ Electronics perfected its security interest within 20 days of the purchase.
• E) The bank had a security interest in the computer because it perfected its security interest before XYZ Electronics did so.

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Definitions:

Margin of Safety

The difference between actual or projected sales and the sales break-even point, indicating risk level.

Dollars

The basic monetary unit used in the United States, symbolized as $, representing the currency.

Contribution Format

A type of income statement presentation that separates fixed costs from variable costs, helping to understand the profitability of a company.

Income Statement

A financial statement that summarizes a company's revenues, expenses, and profits or losses over a specific period.