Which of the Following Statements Is True

question 37

Multiple Choice

Which of the following statements is true?

• A) The use of debt may lead to financial distress and bankruptcy,thus firms that sell expensive,durable products that may have warranties and ongoing service requirements tend to use less debt.
• B) The use of debt may lead to financial distress and bankruptcy,thus firms that sell expensive,durable products that may have warranties and ongoing service requirements tend to use more debt.
• C) Companies with a large proportion of tangible assets should be more willing to use debt than firms with mostly intangible assets.
• D) Companies with a large proportion of tangible assets should be less willing to use debt than firms with mostly intangible assets.
• E) Both (a)and (c)

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Definitions:

Asymptotes

Lines that a graph approaches but never reaches, often defining the boundary of its behavior.

Vertices

The corner points where two or more edges meet in a geometric shape or figure; singular form is "vertex."

Ellipse

A plane curve encircling two centers where the total distance from any point on the curve to the two centers remains unchanged.

Center

The midpoint or central point of a geometric shape, or a point that is equidistant from all points on the circumference of a circle or sphere.