Greg Told Rick That He Would Be Willing to Pay

question 62

Multiple Choice

Greg told Rick that he would be willing to pay a high rate of interest for a two-month loan of $2,000. Rick agreed to lend Greg this amount at an annual rate of 20%, repayable March 1, 2011. Greg agreed to these terms. Greg did not pay on March 1. Rick learned that Greg had recently completed some work for Martinson for which Greg was owed $2,000. Now that Greg is in default, which of the following is false?

• A) Rick could not place Greg into bankruptcy unless Greg had committed an "act of bankruptcy."
• B) Rick could sue Greg for breach of contract.
• C) Once he has obtained judgment, Rick can garnishee the money owed to Greg by Martinson.
• D) Rick could execute against Greg even if Rick had not obtained judgment against him.
• E) If Rick obtained a judgment against Greg, he could compel him to be examined about his income, property, and debts.

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Definitions:

Direct Labor-Hours

The total time workers spend producing a product or service, directly associated with the specific work on the product.

Departmental Predetermined Overhead Rates

Overhead rates calculated for specific departments within a manufacturing facility, reflecting the unique costs associated with each department's operations.

Machine-Hours

A measure of the time machines are used in the production process, often used as a basis for allocating overhead costs in a manufacturing environment.

Markup

The amount added to the cost price of goods to cover overhead and profit, expressed as a percentage of the cost.