When Nortel announced that it was taking $18.4 billion in charges for restructuring costs, bad customer debts, and obsolete inventory, it was taking a(n):

Question

Quizplus · Accepted Answer

Nortel's announcement of taking $18.4 billion in charges for restructuring costs, bad customer debts, and obsolete inventory indicates that it was taking a big bath. This term refers to a strategy where a company chooses to take on all possible bad news in one go by writing off big losses, clearing out inventories, or eliminating employees to create a clean slate for future growth. It is a one-time event, and not a recurring cost, so it cannot be classified as a section 179 allowance.

When Nortel Announced That It Was Taking $18