Which of these is NOT an example of indirect bankruptcy costs?
A) A firm's customers become concerned about whether or not warranties will be honored.
B) Employees begin to leave the firm.
C) New accountants are brought in to help with the bankruptcy process.
D) A bankruptcy judge orders new projects to be halted.

Question

Quizplus · Accepted Answer

Indirect bankruptcy costs refer to the negative effects on a firm's business operations and relationships, such as loss of customers or employees due to bankruptcy concerns. Bringing in new accountants to help with the bankruptcy process is a direct cost associated with managing the bankruptcy, not an indirect cost.

Which of These Is NOT an Example of Indirect Bankruptcy