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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Definitions:

Staff Morale

Staff morale is the overall outlook, attitude, satisfaction, and confidence that employees feel at work. A high morale is often associated with high productivity and retention.

Burnout

A condition of feeling physically, emotionally, and mentally drained due to extended periods of stress or irritation, especially occurring in a professional environment.

Stress

The physical or emotional tension resulting from demanding circumstances or challenges.

Selye

refers to Hans Selye, a pioneering Hungarian-Canadian endocrinologist known for his research on the stress response.