Which of the Following Statements Is False

question 20

Multiple Choice

Which of the following statements is false?

• A) Although indirect costs of bankruptcy are difficult to measure accurately, they are typically much smaller than the direct costs of bankruptcy.
• B) Bankruptcy protection can be used by management to delay the liquidation of a firm that should be shut down.
• C) Because many aspects of the bankruptcy process are independent of the size of the firm, the costs are typically higher, in percentage terms, for smaller firms.
• D) Aside from the direct legal and administrative costs of bankruptcy, many other indirect costs are associated with financial distress (whether or not the firm has formally filed for bankruptcy).

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Definitions:

Unreliable Sales Forecasts

Projections of future sales that are uncertain or likely to be inaccurate due to various factors like market volatility or insufficient data.

Industry-Wide Trends

The prevailing movements or directions that affect an entire industry, encompassing changes in technology, consumer preferences, regulatory environment, and market dynamics.

Service Policies

Guidelines and regulations that govern the provision and quality of service offered by a business.

Customer Problems

Issues or complaints that consumers face while using a product or service, often addressed by businesses through customer service or product improvements.