Amy Mendez Is Contemplating Opening Her Own Business

question 57

Multiple Choice

Amy Mendez is contemplating opening her own business. She should

• A) stick to traditional fields for women (such as women's clothing stores or beauty shops) since nontraditional fields are virtually closed to women.
• B) realize that many banks will be slow to offer loans because she is a woman.
• C) realize that she is going against the flow, in that the proportion of women-owned firms is decreasing slightly.
• D) know that women-owned firms are basically part-time businesses.

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Definitions:

EBIT

EBIT, or Earnings Before Interest and Taxes, represents a company's profit figure that does not take into account expenses stemming from interest and income taxes.

Interest Expense

The cost incurred by an entity for borrowed funds over a period, typically presented in the income statement.

Financial Leverage

Utilizing borrowed funds to enhance the possible yield from an investment.

Long-Term Solvency

A measure of a company's ability to meet its long-term financial obligations and commitments, indicating financial stability over the long term.