Smartt Software Company Borrows $10,000 from Term 'N All Loans,Inc

question 21

Essay

Smartt Software Company borrows $10,000 from Term 'N All Loans,Inc.,but cannot repay the loan when it comes due.Term 'N All refuses to ex?tend the time for repayment unless Smartt can provide an acceptable surety.Uno Venture Corporation agrees to act as a surety for the loan af?ter Smartt offers the firm a discount on software and shows Uno financial statements,compiled with Term 'N All's assistance,that misrepresent Smartt's financial situation.Later,after Uno uses the discount to buy software,Smartt again defaults on repayment of the loan,and Term 'N All files a suit against Uno to collect the amount of the debt.Is Uno liable? Why or why not?

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Definitions:

Compounded Quarterly

Interest calculation method where interest is added to the principal every three months, affecting the total interest earned or paid.

Compounded Monthly

A financial term indicating the interest on a deposit or loan is calculated and added to the principal amount each month; it emphasizes the frequent interest capitalization as opposed to annual.

Investor

A person or organization that invests money anticipating to gain financial profits.

Base Metal Mining

The extraction of non-precious metals such as copper, zinc, nickel, and lead from the earth.