Question

First use of funds under gross lien revenue pledge:

A) Capital expenditure.
B) Operating expenses.
C) Debt service.
D) Working capital.

Answer 1

The first use of funds under the gross lien revenue pledge is debt service.

Step-by-step explanation:

The first use of funds under the gross lien revenue pledge is debt service.

Debt service refers to the payment of interest and principal on debt. When a firm borrows money through banks or bonds, it commits to making scheduled interest payments, regardless of its income levels. Debt service is an essential financial obligation that helps the firm maintain control of its operations without subjecting itself to shareholders.