8. True or False? Remember to give reasons for your answers!
a) When a company becomes bankrupt, it is usually in the interest of the equity holders to seek a liquidation rather than reorganization.
b) A reorganization plan must be presented for approval by each class of creditor.
c) Canada Revenue Agency has the first claim on the company’s assets in the event of bankruptcy.
d) In a reorganization, creditors may be paid off with a mixture of cash and securities.
e) When a company is liquidated, one of the most valuable assets to be sold is the tax-loss carry-forward.
f) I hired a consultant to prepare a feasibility study of a project, which I am actively considering implementing. I paid the consultant $75,000 to do the study. The fee was quite reasonable. The project involves construction of a building for which I would also need a properly located piece of land. I bought such a piece of land about 10 years ago for the unbelievably low price of 1 million. Lucky me! Based on what I describe above, I feel pretty good about the project being a success.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
