This topic contains a solution. Click here to go to the answer

Author Question: The purpose of the restrictive debt covenant that requires that subsequent borrowing be subordinated ... (Read 71 times)

CQXA

  • Hero Member
  • *****
  • Posts: 546
The purpose of the restrictive debt covenant that requires that subsequent borrowing be subordinated to the original loan is to ________.
 
  A) maintain a minimum level of liquidity
  B) limit the amount of fixed-payment obligations
  C) ensure a long-run cash shortage does not cause an inability to meet current obligations
  D) protect the original lender in the priority of claims during liquidation

Question 2

The purpose of the restrictive debt covenant that prohibits the sale of accounts receivable is to ________.
 
  A) assure the lender that additional borrowing is constrained
  B) limit the amount of fixed-payment obligations
  C) limit the realization of current assets to cash
  D) limit the payment of annual cash dividends



Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

daiying98

  • Sr. Member
  • ****
  • Posts: 354
Answer to Question 1

D

Answer to Question 2

C




CQXA

  • Member
  • Posts: 546
Reply 2 on: Jul 11, 2018
Great answer, keep it coming :)


skipfourms123

  • Member
  • Posts: 343
Reply 3 on: Yesterday
Gracias!

 

Did you know?

Asthma-like symptoms were first recorded about 3,500 years ago in Egypt. The first manuscript specifically written about asthma was in the year 1190, describing a condition characterized by sudden breathlessness. The treatments listed in this manuscript include chicken soup, herbs, and sexual abstinence.

Did you know?

The highest suicide rate in the United States is among people ages 65 years and older. Almost 15% of people in this age group commit suicide every year.

Did you know?

Stroke kills people from all ethnic backgrounds, but the people at highest risk for fatal strokes are: black men, black women, Asian men, white men, and white women.

Did you know?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

Did you know?

Human kidneys will clean about 1 million gallons of blood in an average lifetime.

For a complete list of videos, visit our video library