Two Fatal Flaws Can Render a Business Model Untenable from the Beginning

question 5

Multiple Choice

Two fatal flaws can render a business model untenable from the beginning. These are utterly unsound economics and:

• A) a complete misread of the customer
• B) failure to copy the industry leader's business plan
• C) overemphasis on the importance of feasibility analysis
• D) overemphasis on the importance of industry analysis
• E) failure to complete a business plan prior to developing a business model

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Definitions:

Extraordinary Item

Extraordinary items were once classified on income statements to denote unusual or infrequent transactions that were distinct from regular business operations, but accounting standards have evolved to limit or exclude these classifications.

Extraordinary Losses

Non-recurring losses that are unusual in nature and infrequent in occurrence, significantly impacting a company's financial performance.

Tornado Damage

The destruction or loss caused by a tornado, affecting buildings, infrastructure, and communities, potentially leading to financial losses and insurance claims.

Obsolete Inventory

Inventory that is no longer sellable because it is out of date, out of fashion, or has become technologically redundant.