The Price That a Secured Party Obtains on a Sale

question 5

True/False

The price that a secured party obtains on a sale of collateral is all that the creditor can recover on the debt regardless of any deficiency.

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Definitions:

Pretax Return

The income or profit earned by a business before the deduction of tax.

Net Present Value

A financial metric that calculates the difference between the present value of cash inflows and outflows over a period of time, used to assess the profitability of an investment.

Annual Cash Savings

The amount of money saved over the course of a year as a result of cost-cutting measures, efficiency improvements, or other savings opportunities.

Discount Rate

The interest rate used to discount future cash flows to their present value, thereby reflecting the time value of money.