Which of the Following Is True About Business Planning

question 95

Multiple Choice

Which of the following is true about business planning?

• A) Business planning involves taking action before developing objectives.
• B) Business planning is an ongoing process.
• C) Business planning is concerned with the long term but not the short term.
• D) Business planning is concerned with the short term but not the long term.
• E) Business planning takes place after development of the marketing plan.

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Definitions:

Interest Tax Shield

The interest tax shield refers to the reduction in income taxes resulting from deducting interest payments on debt from taxable income.

Corporate Tax Rate

The corporate tax rate is the percentage of a corporation's taxable income that it must pay to the government as taxes.

Debt

A sum of money lent by one party to another, which has to be repaid at a future date, typically with added interest.

Debt Ratio

A ratio that evaluates how much a business relies on debt financing, calculated through the division of the company's total liabilities by its total assets.