If a Company Is in Financial Trouble the Directors May

question 43

Multiple Choice

If a company is in financial trouble the directors may protect themselves from liability for insolvent trading by appointing:

• A)A receiver will receive the accounts and negotiate with secured creditors.
• B)An administrator who will try to resolve the company's financial problems.
• C)A secured creditor who will try to prevent other creditors from winding up the company.
• D)A liquidator who will try to raise as much finance as possible within 30 days.

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Definitions:

Pumpkins

A plant belonging to the squash family, often used for food, decoration, or as commodities in agricultural markets.

Constant Marginal Cost

A situation where the cost of producing an additional unit of output is the same, regardless of the volume produced.

Inverse Demand

A mathematical function that expresses the price of a good or service as a function of the quantity demanded, showing how price changes with demand.

Cournot Duopolists

Firms in a Cournot duopoly compete by choosing quantities rather than prices, assuming the quantity set by the competitor as given while deciding their own.