Which of the Following Statements Is FALSE

question 4

Multiple Choice

Which of the following statements is FALSE?

• A)Calculating the precise present value of financial distress costs is a relatively straightforward process.
• B)Two key qualitative factors determine the present value of financial distress costs: (1)the probability of financial distress and (2)the magnitude of the costs after a firm is in distress.
• C)Technology firms are likely to incur high costs when they are in financial distress,due to the potential for loss of customers and key personnel,as well as a lack of tangible assets that can be easily liquidated.
• D)The magnitude of the financial distress costs will depend on the relative importance of the sources of these costs and is likely to vary by industry.

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Definitions:

International Trade

The exchange of goods and services across national borders, influenced by comparative advantages, tariffs, quotas, and agreements.

Seller

An individual or entity that offers a product or service for sale.

Buyer

An individual or organization that purchases goods or services for personal use or for the purpose of resale.

GATT

General Agreement on Tariffs and Trade, an international trade agreement aimed at reducing tariffs and other trade barriers.