New Ventures

question 42

Multiple Choice

New ventures:

• A)should be killed if they don't make a profit within three years.
• B)are often preferred by technology-based companies.
• C)are preferred compared to acquisitions when entry barriers are high.
• D)are less risky than acquisitions.
• E)are best when the company is entering the industry on a small scale.

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Definitions:

Credit Sales

Sales transactions in which the customer is allowed to pay for goods or services at a later date, creating accounts receivable for the seller.

Cash Disbursements

The total amount of cash payments made by a business, including expenses, purchases, and debt payments.

Material Purchases

The total cost of raw materials acquired for use in the production process.

Est. Cost of Goods Sold

An estimated figure representing the cost directly associated with the production of the goods sold by a company.