Final answer:
The method used to determine the value of a business if it were to bankrupt is called liquidation value. It represents the estimated value of the business' assets when they are sold off in a bankruptcy scenario.
Step-by-step explanation:
The method used to determine the value of a business if it were to bankrupt is called liquidation value. The liquidation value is the estimated value of the business' assets when they are sold off in a bankruptcy scenario. It represents the amount that would be left for the business' creditors after all the debts are paid off.
For example, let's say a business has $1 million in assets and $500,000 in liabilities. If the business were to bankrupt and its assets were sold off, the liquidation value would be $500,000 ($1 million - $500,000). This would be the value that the business' creditors would receive.