Which One of the Following Is a Direct Cost of Bankruptcy

question 31

Multiple Choice

Which one of the following is a direct cost of bankruptcy?

• A) Bypassing a positive NPV project to avoid additional debt
• B) Investing in cash reserves
• C) Maintaining a debt-equity ratio that is lower than the optimal ratio
• D) Losing a key company employee
• E) Paying an outside accountant to prepare bankruptcy reports

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