Which of the Following Statement(s) About Financial Distress Is(are) True

question 30

Multiple Choice

Which of the following statement(s) about financial distress is(are) true:
I. always ends in bankruptcy
II. firms can postpone bankruptcy for many years
III. ultimately the firm may recover and avoid bankruptcy altogether

• A) I only
• B) II only
• C) II and III only
• D) III only

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Definitions:

Impoundment Control Act

A 1974 U.S. law designed to restrict the power of the President to impound funds appropriated by Congress, ensuring that authorized funds are spent.

Committee System

A method of delegating legislative or administrative tasks to smaller, specialized groups within a larger organization or governing body, often found in parliaments or congresses.

Congress

A bicameral body that constitutes the legislative branch of the United States, tasked with creating and passing federal laws, comprising two parts: The Senate, representing states equally, and the House of Representatives, representing districts based on population.

Federalists

Supporters of the ratification of the U.S. Constitution, advocating for a strong central government to unite the states and manage national issues effectively.