Which of the Following Factors Is a Negative as It

question 13

Multiple Choice

Which of the following factors is a negative as it pertains to the financial feasibility of a business venture?

• A) steady and rapid growth in sales during the first five to seven years in a clearly defined market niche
• B) high percentage of recurring revenue-meaning that once a firm wins a client, the client will provide recurring sources of revenue
• C) inability to forecast income and expenses with a reasonable degree of accuracy
• D) internally generated funds to finance and sustain growth
• E) availability of an exit opportunity for investors to convert equity into cash

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Definitions:

Product Demand

Refers to the desire and necessity for consumers to purchase a specific good or service.

Carrying Cost

Costs incurred by holding inventory, including storage, insurance, and opportunity costs, over a specific period.

Credit Sales

Credit sales are transactions where the purchase of goods or services is made on credit, with payment to be made at a later date.

Lenient Credit Terms

Lenient credit terms are more favorable conditions provided by a lender, allowing for longer repayment periods or lower interest rates to facilitate easier repayment for the borrower.