Which of the Following Should Be the Result in Regard

question 43

Multiple Choice

Which of the following should be the result in regard to Isabella's obligation to Credit Card Company B?

• A)That because the car is worth only $1,000,nowhere near the amount of the debt,the company is released from its promise.
• B)That under equitable principles,upon disaffirming the agreement,Isabella may keep the car,and the company must take a deduction of 50% on all amounts due.
• C)That under equitable principles,upon disaffirming the agreement,Isabella must transfer the car to the company,and the company must take a deduction of 50% on all amounts due after sums received from the sale of the car are credited to Isabella's account.
• D)That because Isabella offered and the company accepted a different performance in discharge of the obligation,the company is bound.
• E)That the company is not bound by its promise because the debt was liquidated.

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Definitions:

Present Value

The present worth of a future sum of money or series of cash flows, when discounted at a specific rate of interest.

Coupon Payment

The interest payment made to the bondholders by the issuer of the bond.

Term to Maturity

Term to Maturity is the remaining time until a debt instrument, such as a bond, reaches its due date and the principal must be repaid.

Debentures

Long-term securities issued by companies to borrow money, often with a fixed rate of interest.