When the Projected Liabilities and Equity Are Greater Than the Assets

question 94

Multiple Choice

When the projected liabilities and equity are greater than the assets, the firm can plan to ________.

• A) retain extra cash
• B) pay dividends
• C) retire debt
• D) all of the above

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Definitions:

Title Warranties

Legal guarantees in a sale that the seller has the right to transfer ownership and that there are no undisclosed encumbrances.

Implied Warranty

An unwritten guarantee that the product or service sold is fit for the purpose intended and meets the buyer's expectations.

Fitness For A Particular Purpose

A guarantee that a product will meet the specific requirements or needs of the buyer, as acknowledged by the seller.

Seller Or Lessor

The party in a transaction who is selling or leasing a good, service, or property to another party, known as the buyer or lessee.