It has been observed that, when firms get into financial trouble, they often find it difficult to attract and retain high-quality employees. The additional costs incurred in this situation would be considered direct bankruptcy costs.

Question

Quizplus · Accepted Answer

The additional costs incurred in attracting and retaining high-quality employees when a firm is in financial trouble are considered indirect bankruptcy costs, not direct. Direct bankruptcy costs are those expenses that are directly associated with the bankruptcy process, such as legal and administrative fees.

It Has Been Observed That, When Firms Get into Financial