When Evaluating the Financial Data of a Business You Are

question 80

Multiple Choice

When evaluating the financial data of a business you are considering purchasing, which issue(s) should you look for?

• A) Understated income in an effort to minimize taxes
• B) Unrealistically reduced levels of advertising cost
• C) Business expenses related to personal use of vehicles
• D) All of the Above

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Definitions:

Minimizes Profit

A situation or strategy that unintentionally reduces the potential earnings or efficiency of a business operation.

Aggregate Planning

A process by which a company determines optimal levels of capacity, production, subcontracting, inventory, stockouts, and even pricing over a specified time horizon.

Capacity

The maximum number of goods a company can produce or the amount of work it can perform in a given time period, under current conditions.

Production

The process of creating goods and services through the combination of labor, materials, and machinery.