Question

The costs incurred by a business in an effort to avoid bankruptcy are classified as _____ costs. Flotation Direct bankruptcy Indirect bankruptcy Financial solvency Capital structure

Answer 1

Answer:

The correct answer is indirect bankruptcy costs.

Explanation:

Indirect costs are considered to be damage to the image and reputation of the company, lost investment opportunities, credit restrictions, conflicts with suppliers, loss of sales, conflicts with workers. Indirect costs are usually much higher than direct costs.