What Is the First Step in Developing a Financial Plan

question 16

Multiple Choice

What is the first step in developing a financial plan?

• A) set financial goals
• B) know where your money goes
• C) take a financial inventory
• D) create a budget
• E) execute the plan

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Definitions:

Scrap Value

The estimated resale value of assets at the end of their useful life or the value of leftover materials after the production process.

Operating Income

The profit realized from a business's core operations, excluding deductions of interest and taxes.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption or wear and tear.

Investment

This is the allocation of resources, usually money, in the expectation of generating an income or profit.