The Main Purpose of Writing a Business Plan Is to Test

question 37

True/False

The main purpose of writing a business plan is to test the viability of the business idea and set a path for the entrepreneur to follow.

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Definitions:

Sinking Funds

A method for a company to pay off debt by setting aside money over time, ensuring funds are available to repay the debt or replace an asset.

Current Liability

A company's debts or obligations that are due within one year or within the normal operating cycle, necessitating the use of current assets or the creation of new current liabilities.

Operating Cycle

The period it takes for a company to purchase inventory, sell it, and convert the sale into cash.

Bonds Payable

Long-term liabilities representing borrowed money that a company must repay to bondholders, typically with periodic interest payments.