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Question
Which of the following statements is not true?
a. Technical insolvency arises when a firm is unable to meet its obligations when they come due.
b. Legal insolvency occurs when a firms liabilities exceed the fair market value of its assets.
c. A firm must be legally insolvent to enter bankruptcy.
d. Bankruptcy is a legal proceeding which protects a debtor firm from its creditors.
e. A firm is not considered bankrupt until its petition for bankruptcy is accepted by the court.
Answer
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