Which of the Following Is the Strongest Indication of a Bust-Out

question 13

Multiple Choice

Which of the following is the strongest indication of a bust-out?

• A)The company has one permanent address in downtown San Jose.
• B)Management suddenly changes without public notice.
• C)Inventory suddenly and dramatically increases.
• D)One of the credit references is Chase Manhattan.

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Definitions:

Default

Failure to fulfill a financial obligation, such as missing a loan repayment.

Debt

An amount of money borrowed by one party from another, often for making large purchases that they could not afford under normal circumstances, which needs to be paid back.

FICA

Federal Insurance Contributions Act; a United States federal payroll tax imposed on both employees and employers to fund Social Security and Medicare.

Federal Income Taxes

Taxes imposed by the federal government on the annual earnings of individuals, corporations, trusts, and other legal entities.