Which of the Following Is an Important Reason for Preparing

question 137

Multiple Choice

Which of the following is an important reason for preparing a business plan?

• A)To persuade investors to invest in your company
• B)To obtain financing from a bank
• C)To use as a yardstick by which you can measure your business' performance
• D)All of the above are reasons for preparing a business plan

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Definitions:

Payback Period

A financial metric that calculates the time required for an investment to generate cash flows sufficient to recover the initial investment cost.

Direct Materials

Raw materials that can be directly attributed to the production of specific goods or services, integral to the finished product.

Direct Labor

The labor costs directly associated with the production of goods or services, including wages of workers who are directly involved in manufacturing.

Net Cash Inflows

The difference between all cash inflows and outflows within a given period, indicating a company's ability to generate cash.