Which of the Following Statements Is True Regarding the Profitability

question 117

Multiple Choice

Which of the following statements is true regarding the profitability of new businesses?

• A) It may take several years for a new business to begin showing a profit.
• B) Profitability is not an important issue for new businesses.
• C) Most new businesses will turn a profit within the first year.
• D) If a company does not show a profit within the first year, it will fail.
• E) Most new businesses are highly profitable when they first start.

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Definitions:

Current Period

refers to the present accounting period under consideration, typically a month, quarter, or year.

Maintenance Cost

Expenses incurred in the upkeep of assets, such as machinery or buildings, to ensure their efficient operation and prolong their life.

Baking Department

The baking department refers to a specialized division within a company or facility focused on the production of baked goods, employing specific techniques and processes.

Floor Space

The total area available or used for a specific purpose within a building, often measured in square feet or meters.