Which of the Following Statements Is FALSE

question 8

Multiple Choice

Which of the following statements is FALSE?

• A)The direct costs of bankruptcy are likely to be higher for firms with more complicated business operations and for firms with larger numbers of creditors,because it may be more difficult to reach agreement among many creditors regarding the final disposition of the firm's assets.
• B)In a prepackaged bankruptcy (or "prepack")a firm will first develop a reorganization plan with the agreement of its main creditors,and then file Chapter 7 to implement the plan and pressure any creditors who attempt to hold out for better terms.
• C)A study of Chapter 7 liquidations of small businesses found that the average direct costs of bankruptcy were 12% of the value of the firm's assets.
• D)Studies typically report that the average direct costs of bankruptcy are approximately 3% to 4% of the pre-bankruptcy market value of total assets.

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Definitions:

Distraction

Any stimulus or event that diverts attention away from a primary task or point of focus.

Retrieval Cues

Memory aids or stimuli that assist in the recall of information from the memory.

Episodic Memory

A category of long-term memory that involves the recollection of specific events, situations, and experiences, including the context and emotions associated with them.

Semantic

Relating to meaning in language or logic, particularly the relationship between signs and symbols and what they represent.