Because debtor-in-possession (DIP) financing is senior to all existing creditors:

Group of answer choices

it allows a firm that has filed for bankruptcy renewed access to financing to keep operating.

it is an important cost for firms that rely heavily on trade credit.

it is likely to be small for producers of raw materials, as the value of those goods, once delivered, does not depend on the seller's continued success.

it prevents a firm from filing bankruptcy.

it allows debtors to assume they may have an opportunity to avoid their obligations to a firm.