Which of the Following Statements Is False

question 70

Multiple Choice

Which of the following statements is false?

• A) According to the provisions of the 1978 Bankruptcy Reform Act, U.S. firms can file for two forms of bankruptcy protection: Chapter 11 or Chapter 13.
• B) The Chapter 11 reorganization plan specifies the treatment of each creditor of the firm. In addition to cash payment, creditors may receive new debt or equity securities of the firm. The value of cash and securities is generally less than the amount each creditor is owed, but more than the creditors would receive if the firm were shut down immediately and liquidated.
• C) In the more common form of bankruptcy for large corporations, Chapter 11 reorganization, all pending collection attempts are automatically suspended, and the firm's existing management is given the opportunity to propose a reorganization plan.
• D) While developing a Chapter 11 reorganization plan, management continues to operate the business.

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Definitions:

Indifference Curve

a graph showing different combinations of two goods that give a consumer equal satisfaction and utility.

Budget Constraint

The limitations on the consumption choices of an individual or household due to limited financial resources.

MUx/MUy

Represents the marginal utility of good x divided by the marginal utility of good y, often used in consumer choice theory to analyze optimal consumption points.

Indifference Curve Analysis

A graphical representation of consumer preferences showing combinations of goods or services among which they are indifferent, demonstrating varying levels of utility.