Martinson used his van to deliver illegal drugs to users throughout a particular city. Because the van was old, he decided to trade it in for a new van. The contract that Martinson makes with the car agency to purchase a new van is
a. illegal; therefore, Martinson would not have to pay for the van when it is delivered to him.
b. legal; therefore, Martinson would have to pay for the van when it is delivered to him.
c. illegal; therefore, when Martinson receives the van, he must return it to the car agency.
d. illegal; therefore, Martinson would not have to pay for the van when it is delivered to him, but when Martinson receives the van, he must return it to the car agency.
B
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Ali Khan has a plan to make his business "judgement proof". He incorporates a holding company called Khanco Ltd., which owns all the shares of a subsidiary; Khanex Inc Khanex operates his business
As Khanex makes profits, they are distributed in full by dividends to Khanco. Khanco then lends the money back to Khanex for purchasing assets, and registers a security interest in those assets. If Khanex runs into financial difficulty, which of the following is true? A) This is a perfectly legitimate (or at least legal) scheme B) Khanco's security interests takes priority over the claims of any unsecured creditors of Khanex, even though Khanex is subsidiary to Khanco. C) Before extending credit to Khanex, its creditors should have checked to see if there were any registered security interests attaching to its assets. D) Both A and B E) All of the above
Cash flows associated with the purchase and sale of fixed assets and business interests are called cash flow from ________
A) operating activities B) investment activities C) financing activities D) equity activities