Suppose You Are a Small Business Development Center Counselor and You're

question 11

Multiple Choice

Suppose you are a Small Business Development Center counselor and you're looking at the personality profiles of five potential entrepreneurs. Based on the profiles, which individual has the most desirable mix of personal characteristics to become a successful entrepreneur?

• A) Candidate A: visionary, energetic, moderate risk taker
• B) Candidate B: seeks recognition, self-starter, creative
• C) Candidate C: visionary, high-risk taker, energetic
• D) Candidate D: high-risk taker, achievement-motivated, networker
• E) Candidate E: tolerant for ambiguity, seeks recognition, motivated primarily by money

Determine the break-even point in units and dollars.

Recognize the impact of changes in cost structures and sales on the break-even point and profitability.

Understand the concept of operating leverage and its effects on profitability.

Calculate the margin of safety and understand its importance in assessing business risk.

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Definitions:

Depreciation Calculations

Methods used to allocate the cost of a tangible asset over its useful life, reflecting its decrease in value.

Shareholder Reporting

The process of providing financial and operational information to a company's shareholders, typically on a quarterly and annual basis.

Financial Statements

Reports that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement, at a particular point in time.

Common Dividends

Payments made to shareholders of a company's common stock, representing a portion of the company’s earnings distributed to its owners.