Within Altman's Z Score Model of Predicting Bankruptcy,the Total Value

question 76

Multiple Choice

Within Altman's Z score model of predicting bankruptcy,the total value of the assets are included in the model.If the total value of the assets decreases what effect does that have on the probability of the firm being in bankruptcy?

• A) increases
• B) remains the same
• C) decreases
• D) it is impossible to determine since the value of the assets is only used as a parameter in the model

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Definitions:

Monopolies

Market situations where a single supplier dominates the supply of a particular good or service, limiting competition and potentially leading to higher prices and reduced innovation.

Entire Industry Supply

The total quantity of a specific good or service that is available to consumers from all producers in a particular industry.

Demand Curve

A graph showing the relationship between the price of a good and the quantity demanded, typically downward sloping to the right.

Corporate Hierarchy

A structure in corporations that defines the levels of authority, roles, and responsibilities from top management to lower-level employees.