Replace Calculations into the Bankruptcy Agreement and eSign it in minutes

Aug 6th, 2022
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How to Replace Calculations into the Bankruptcy Agreement

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one of the decisions that managers may face almost certainly will face is replacing an old machine with a new machine now as we take a look at this what we really want to do is we want to whittle away the irrelevant costs and focused only on the differential costs those things that differ between alternatives lets take a look at what we know about the old machine we bought it originally for $90,000 so its on the balance sheet with a historical cost of 90,000 Alex and weve been depreciating this asset accumulated depreciation 33 grand so we have a Book value here of 57 thousand dollars now if we wanted to sell this machine we could sell it right now for $14,000 if we wait five years and sell it after using it for another five years we probably will only be able to sell it for $2,000 were depreciating the asset at a rate of $11,000 per year which tells you that weve been depreciating it for three years the depreciation thats accumulated is 33,000 so thats three years and we incur

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Under the Bankruptcy Code, if you incur new debt through no fault of your own after you file a Chapter 13 but beforeyou convert it to a Chapter 7 case, the debts are treated as though they are pre-petition debts. This means that theyre discharged in the Chapter 7 case after conversion.
Direct costs of bankruptcy are those that involve the actual filing of bankruptcy, such as court costs, lawyers fees, and administrative fees. In contrast, indirect costs are related to lost opportunities and a companys decisions in light of the bankruptcy. To unlock this lesson you must be a Study.com Member.
A debtor in a bankruptcy case may decide to remain legally obligated to pay a debt that would otherwise be discharged in bankruptcy. This is called reaffirming a debt. Reaffirming a debt is voluntary; debtors are not required to reaffirm any debt.
The cost of bankruptcy can be calculated by multiplying the probability of bankruptcy by its expected overall cost. Bankruptcy costs vary depending on the structure and size of the company.
What Financial Ratios Determine Bankruptcy? There are a handful of financial ratios that can help determine if a company is heading toward bankruptcy. These include the gross profit margin, the cash flow to debt ratio, the debt to equity ratio, and the current ratio.
The direct cost of bankruptcy refers to the deadweight cost of going bankrupt, which includes the legal and liquidation costs associated with the act of bankruptcy. The indirect cost refers to the lost sales and higher costs associated with the perception that a firm is in trouble.
2-4-6-8. Two: you can file a new Chapter 13 two years after a previous Chapter 13 case was filed. Four: you can file a new Chapter 13 four years after a prior Chapter 7 case was filed. Six: you can file a new Chapter 7 case six years after a prior Chapter 13 case was filed.
Calculate for the weighted average cost of debt. Take that weighted average and subtract from it the cost of debt maintenance of an AAA-rated company. Figure the cost of financial distress in dollar terms by multiplying the financial distress cost (in percentage terms) by the total amount of debt.

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