Maria and Miguel Blanco Are in the Midst of Negotiating

question 115

True/False

Maria and Miguel Blanco are in the midst of negotiating a divorce. Because both parties are unwilling to share any current financial information, their joint Form 1040 for 2012 is not filed until October 31, 2013, when the respective divorce attorneys forced them to cooperate. The Blancos should not be subject to any Federal late-filing penalties, because of the reasonable cause exception.

---

Definitions:

Break-Even Default Rate

The rate of default at which a lender breaks even on a loan, neither earning a profit nor incurring a loss.

Monthly Interest Rate

The interest rate expressed as a monthly percentage, reflecting the cost of borrowing or the earnings on savings for one month.

Credit Policy

Guidelines that a company follows to determine credit terms for customers, which can affect the company's cash flow and bad debt levels.

Reorder Point

The inventory level at which a new order should be placed to replenish stock before it becomes too low, calculated based on lead time and sales velocity.