Asked by Shawntay Williams on May 09, 2024
Verified
Loss of key employees is an indirect cost of bankruptcy.
Indirect Cost
Expenses not directly tied to the production of goods or services, such as office supplies, utilities, and administrative salaries.
Bankruptcy
A legal proceeding involving a person or business that is unable to repay their outstanding debts, leading to a reorganization or elimination of debt under the laws of bankruptcy.
Key Employees
Employees considered crucial to the operation and success of a business due to their skills, knowledge, or roles.
- Gain insight into the secondary financial burdens of bankruptcy, including the exodus of crucial staff members and the relinquishment of potentially successful ventures.
Verified Answer
CC
Cambria ChatmanMay 16, 2024
Final Answer :
True
Explanation :
Loss of key employees is considered an indirect cost of bankruptcy because it does not directly relate to the financial transactions or legal proceedings of the bankruptcy process, but rather results from the uncertainty and operational disruptions that bankruptcy can cause.
Learning Objectives
- Gain insight into the secondary financial burdens of bankruptcy, including the exodus of crucial staff members and the relinquishment of potentially successful ventures.