Beaver, McNichols and Rhie Have Developed the Following Model to Predict

question 49

Multiple Choice

Beaver, McNichols and Rhie have developed the following model to predict the chance of failing during the next year relative to chance of not failing for firms: log(relative chance of failure) = -6.445 - 1.192 ROA + 2.307 (liabilities/assets) - 0.346(EBITDA/liabilities) using:

• A) multiple discriminant analysis
• B) real options analysis
• C) hazard analysis
• D) none of the above

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Definitions:

Atmosphere

The layer of gases surrounding Earth, protecting it from extreme temperatures and harmful space energies.

Gaseous Layer

A stratum of the atmosphere composed of gases, such as the ozone layer, which provides protection from the sun's harmful ultraviolet radiation.

Planet

A celestial body orbiting a star or stellar remnant, with sufficient mass for self-gravity and a clear path in its orbit.

Insect Family

A classification level within the scientific taxonomy of insects, grouping together species that share common characteristics and evolutionary ancestors.