The Value Test That a Business Plan Must Pass to Attract

question 100

Multiple Choice

The value test that a business plan must pass to attract financing from lenders and investors involves proving ________.

• A)that the company can gain a competitive advantage over its key competitors
• B)that the business venture will provide lenders and investors a high probability of repayment or an attractive rate of return
• C)that a market for the company's product or service actually does exist and that the company can actually build it for the cost estimates included in the plan
• D)that the industry in which the business will compete is growing faster than the overall economy and has room for more competitors

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Definitions:

Loanable Funds

The money available for borrowing in the financial markets, determined by the levels of savings and demand for loans.

Rate of Inflation

The rate of inflation is the pace at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.

Operational Efficiency

The ability of an organization to minimize waste and maximize output with the least input of resources like time, money, and labor.

Public-Sector Managers

Individuals who oversee and lead government agencies, departments, or publicly owned corporations, ensuring the delivery of public services efficiently and effectively.