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In 2 0 0 8 , the United States began to witness one of the worst recessions since the 1 9 3 0 s .
In the United States began to witness one of the worst recessions since the s The collapse of the housing bubble in led to a massive decline in real estate prices, affecting consumers and institutions, especially banking and financial entities. Severe liquidity shortfalls in the United States as well as other global markets led to a serious credit crisis.
During the credit crisis of several banks and other businesses went through a reorganization process or were forced to liquidate. Consider the following statement:
In January American electronics retailer Circuit City Inc. closed all of its stores and sold all of its merchandise.
The above is an example of
reorganization.
liquidation.
Which of the following scenarios would most likely lead to a liquidation?
If there is a good chance of restoring the firm to financial health
If the companys assets can be sold off for more money than the company could earn as a going concern
If the value of the firm as a going concern exceeds the value of the assets
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