John,James,and Frank Wanted to Open J₂F Sports Bar That Offers

question 222

Multiple Choice

John,James,and Frank wanted to open J₂F Sports Bar that offers unique brands of beer,weekend entertainment,and a limited menu.In one of the preliminary meetings,James presented a list of reasons that small businesses fail.Although many of the ideas on this list were applicable to many types of business,one challenge pertained specifically to the restaurant and bar business.The challenge he referred to was:

• A)Underestimating how much time it will take to build a market.
• B)Borrowing money without planning just how and when to pay it back.
• C)Carrying habits of personal extravagance into the business.
• D)Some of the easiest businesses to start have the least growth and greatest failure rate.

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Definitions:

Days Sales Outstanding

A measure that calculates the average time it takes for a company to collect payments after a sale has been made.

Accounts Receivable

Funds that customers owe to a business for products or services rendered but for which payment has not yet been received.

Net Sales

Revenue generated from the sale of goods or services, minus returns, allowances, and discounts.

Debt Ratio

A financial ratio that measures the extent of a company's leverage by comparing total liabilities to total assets.