Which of the Following Is a Mistake That a Writer

question 13

Multiple Choice

Which of the following is a mistake that a writer of a good business plan should avoid?

• A) Being overly optimistic
• B) Understating profits
• C) Understating expenses
• D) Using the most current information available

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Definitions:

Cash Collection

The process of gathering all cash payments received from customers, often related to sales or services, improving a company's liquidity.

Budget Slack

The practice of underestimating revenue or overestimating costs while preparing a budget to create a buffer, which can be used to handle unforeseen financial situations.

Planning

The process of setting goals, determining resources needed to achieve those goals, and outlining the steps necessary to accomplish them.

Loose Budgets

A financial plan that allows for higher spending and less stringent controls, often to accommodate for uncertainty or to encourage creativity and innovation.