A Provision in Which Semiannual or Annual Contributions Are Made

question 70

Multiple Choice

A provision in which semiannual or annual contributions are made by a corporation into a fund administered by a trustee for purposes of debt retirement is referred to as a:

• A)Call provision
• B)Put provision
• C)Sinking-fund
• D)Serial payment

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Definitions:

Times Interest Earned Ratio

The times interest earned ratio is a financial metric that measures a company's ability to meet its debt obligations based on its current earnings before interest and taxes (EBIT).

Default in Payment

Occurs when a borrower fails to make a loan payment on time as agreed upon in the loan agreement.

Gross Profit Rate

The percentage difference between a company's net sales and the cost of goods sold, indicating the efficiency of sales generation.

Sales Dollar

Refers to the total revenue generated from sales of goods or services, measured in dollars.