Brian Is the Sole Proprietor of Long Voyage Software,which Generates

question 90

Multiple Choice

Brian is the sole proprietor of Long Voyage Software,which generates maps for wilderness trips.He started the business with an initial investment of $80,000.A faulty map caused one customer to get hopelessly lost.After her rescue and recuperation,she sued Long Voyage for $5,000,000.Which of the following is true?

• A)The customer can be awarded only $80,000-what the firm has available to pay.
• B)The customer can be awarded $5,000,000 but can get only $80,000.
• C)The customer can be awarded $5,000,000,but Brian personally won't have to pay more than $80,000.
• D)If $5,000,000 is awarded,Brian will have to pay none of it.
• E)If $5,000,000 is awarded,Brian is personally responsible for paying all of it.

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Definitions:

Legal Distributions

Payments made by a company to its shareholders or owners as declared in its corporate charter or bylaws and approved by regulators.

Book Value

Represents the value of an asset according to its balance sheet account balance, taking into account the cost of the asset and any depreciation or amortization.

Preferred Stock

A type of stock that typically offers dividends and other privileges, like priority in asset liquidation, over common stock but usually doesn't carry voting rights.

Adjustable Rate

Interest rates that are variable and can change over the duration of a loan, typically in relation to an index or benchmark rate.