Which of the Following Statements Is FALSE

question 3

Multiple Choice

Which of the following statements is FALSE?

• A)Whether paid by the firm or its creditors,the indirect costs of bankruptcy increase the value of the assets that the firm's investors will ultimately receive.
• B)In addition to the money spent by the firm,the creditors may incur costs during the bankruptcy process.
• C)The bankruptcy code is designed to provide an orderly process for settling a firm's debts.
• D)To ensure that their rights and interests are respected,and to assist in valuing their claims in a proposed reorganization,creditors may seek separate legal representation and professional advice.

---

Definitions:

Free Market Ethics

Moral principles or standards governing fair and competitive practices in a market economy without undue government intervention.

Duty To Rescue

A legal or moral obligation to provide assistance to a person in danger or distress, under certain circumstances.

Pre-existing Duty

A rule in contract law that states if someone is already legally obligated to perform a certain duty, promising to perform that same duty does not constitute a valid consideration for a new contract.

Employer

A person or organization that hires people to work for wages or salary.