A Clothing Store Has Opened a Credit Account in Which

question 42

Multiple Choice

A clothing store has opened a credit account in which Judy, a college student, gets Alice, her older sister, to agree to pay the amount owed on the account if Judy fails to do so. Which of the following statements is true of this scenario?

• A) Judy is the obligor, and she is secondarily liable to the clothing store.
• B) Alice is the guarantor, and she is primarily liable to make the payments.
• C) Judy is the obligor, and she is contractually liable to the guarantor.
• D) Alice is the guarantor, and Alice's contract must be in writing to be enforceable.

---

Definitions:

Patent Rights

Legal protections granted to inventors, giving them exclusive rights to use, make, and sell their invention for a certain period of time.

Final Cash Flow

The last cash inflow or outflow in an investment's cash flow series, critical for calculating net present value or internal rate of return.

Development

In a general context, it refers to the process of developing or being developed, often associated with economic, social, or technological progress and improvement.

Incremental Cash Flow

The additional cash flow from a company's activities or projects, specifically distinguishing between the cash flows with and without the project.