If a firm is technically insolvent then the firm may arrange

Question

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If a firm is technically insolvent, it means that the firm's liabilities exceed its assets, making it unable to meet its financial obligations. In this scenario, the firm can opt for a workout, which is an informal negotiation between the company and creditors to restructure existing debt and make it more manageable. Alternatively, the firm can choose to arrange a voluntary settlement, which is a formal agreement between the company and its creditors to pay off a portion of its debts over a fixed period. Therefore, both options are viable solutions for a technically insolvent firm.

If a Firm Is Technically Insolvent Then the Firm May