BUSI 3004 Week 6 Quiz (25 out of 25 Points)

1. Question: The purpose of the Bankruptcy Act of 1978 is to: 2. Question: It is best for the entrepreneur to have any litigation in existence transferred to the bankruptcy court. 3. Question: Under Chapter 13, meeting with groups of creditors to amicably solve issues is usually a good idea. 4. Question: The reason why most companies do not come out successfully from a Chapter 11 bankruptcy is because they. 5. Question: If an entrepreneur recognizes the warning signs of bankruptcy early, he or she may be able to prevent it from occurring. 6. Question: Bankruptcy protects entrepreneurs from creditors and competitors. 7. Question: The majority of bankruptcies are mid-size businesses. 8. Question: About ……. percent of firms that file for Chapter 11 make it through the process 9. Question: According to the Small Business Administration, the failure rate of new businesses within the first few years is. 10. Question: One key advantage of an ESOP is that it enhances employee motivation 11. Question: Exchanging stock or something else for existing debt in a bankruptcy is an alternative for all of the following except 12. Question: Because it is so severe, Chapter 7 must always be voluntary. 13. Question: …. Serve alternative in bankruptcy. 14. Question: A "management buyout" is the same thing as an "ESOP." 15. Question: Chapter 11 protection is assured even if the venture does not have a legitimate chance of recovery. 16. Question: A business, when it comes to selling, can be more valuable if it is on a narrow, well-defined segment. 17. Question: Passing the business to an employee ensures the new principal is familiar with the business and the market. 18. Question: Bankruptcy can be used as a bargaining chip with creditors to allow the venture to voluntarily reorganize. 19. Question: An employee stock option plan establishes a new legal entity. 20. Question: About 1% of bankruptcy filings are of this variety: 21. Question: The sale of the company to employees is an exit strategy. 22. Question: The experience of the family run business, it becomes necessary to have well-defined job descriptions to assist in identifying the right person. 23. Question: When a venture is in trouble and facing bankruptcy, the entrepreneur should first sit down with his or her spouse and explain what is happening. 24. Question: The bankruptcy type that is most common is Chapter 7 bankruptcy. 25. Question: The majority of bankruptcies are ……..