Wade Runs a Company That Is Insolvent and Has Committed

question 9

Multiple Choice

Wade runs a company that is insolvent and has committed an act of bankruptcy.Last year,his friend,Jacques,went through personal bankruptcy for three months before being discharged.Wade is preparing for the same proceedings that his friend went though.Which of the following should Wade be aware of?

• A)Unlike his friend,he must have his form of proposal approved by a majority of creditors.
• B)Unlike his friend,he can simply dissolve the company and be absolved of debt.
• C)The company will probably only be discharged from bankruptcy if he pays back all of his debt.
• D)Wade is correct;the bankruptcy will be the same as his friend's.
• E)Wade will have to hire his own trustee,whereas his friend has one assigned to him.

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Definitions:

Satisfaction

The fulfillment of one's wishes, expectations, or needs, or the pleasure derived from this.

Budget Line

An illustrative depiction of every possible pairing of two items that could be bought within a set budget at unchanging prices.

Slope

A measure of the steepness or incline of a line, often calculated as the ratio of the vertical change to the horizontal change between two points on the line.

Good A

A generic term often used in economics to describe a type of product or commodity.