In Order to Make an Intelligent Investment Decision, Entrepreneurs Should

question 293

Multiple Choice

In order to make an intelligent investment decision, entrepreneurs should:

• A) limit their options to those business investments that are backed by the U.S. government.
• B) invest in businesses that have generated a stable rate of profit for at least the past 10 years.
• C) invest only in business opportunities where it is possible to take an active role in management.
• D) compare the risks of potential investments to their expected profits and find the right balance between profit and risk.

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Definitions:

Installment Note

A debt instrument that requires regular payments of principal and interest over a set period.

Fiscal Year

A 12-month cycle utilized by corporations and governmental bodies for the purposes of financial statements and budget planning, not always coinciding with the January to December calendar year.

Principal Repayment

The process of paying back the original amount of money borrowed, excluding interest or other charges.

SUTA

State Unemployment Tax Act; a type of payroll tax that employers are required to pay to the state to fund unemployment benefits.