Question

Which of the following statements about liquidators is false?

1) Liquidators do more than $15 billion in sales annually and earn between 3 percent and 7 percent of the sales.
2) Liquidators have a talent for pricing merchandise and estimating the expense of everything from ad budgets and payrolls to utility bills.
3) They are often called retailing's undertakers or vultures.
4) Most liquidators pay through credit for the merchandise–a plus for the strapped retailer–and then take all the risks and gain the rewards.
5) They assume responsibility for a retailer's leases, payroll, and other costs and agree either to take a percentage of what they sell or agree in advance to purchase the existing inventory.

Answer 1

Liquidators do not normally assume responsibility for a retailer's ongoing operational costs like leases and payroll. They purchase a company's inventory to sell off, recuperating funds through asset liquidation.

Step-by-step explanation:

The statement about liquidators that is false is: 'They assume responsibility for a retailer's leases, payroll, and other costs and agree either to take a percentage of what they sell or agree in advance to purchase the existing inventory.'

Typically, liquidators are companies or individuals that purchase the assets of a failing company, such as its inventory, but they do not normally assume responsibility for the retailer's leases, payroll, and other ongoing operational costs. Instead, they focus on recouping funds by selling off the assets as quickly and efficiently as possible. They may operate on a consignment basis, taking a percentage of the sales, or agree upfront to buy the inventory at a negotiated price.