If Business Planning Predicts That Your Gross Margins Will Be

question 17

Multiple Choice

If business planning predicts that your gross margins will be 5%, you would be best advised to:

• A)redesign your concept or abandon your concept.
• B)keep your business small so that you can manage costs.
• C)focus on guerilla marketing to target a niche.
• D)All of the above
• E)None of the above

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Definitions:

Loan to Value Ratio

A financial term used by lenders to express the ratio of a loan to the value of an asset purchased.

Amortized

Relates to spreading payments over multiple periods to gradually eliminate a liability or loan, incorporating both principal and interest components.

Compounded Semiannually

The calculation of interest where the interest earned over a period is added to the principal, and the process is repeated twice a year.

Gross Debt Service Ratio

A financial ratio that compares an individual's monthly housing costs (including mortgage payments, property taxes, and utilities) to their gross monthly income, used by lenders to assess borrowing capacity.