Perhaps the Ideal Source of Financing the Purchase of an Existing

question 35

Multiple Choice

Perhaps the ideal source of financing the purchase of an existing business is:

• A)the seller.
• B)the Small Business Administration.
• C)a venture banker.
• D)your local bank.

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Definitions:

Contribution Margin

The amount by which a product's sales price exceeds its variable costs, indicating how much it contributes towards covering fixed costs and generating profit.

Sales Revenues

The income received by a company from its sales of goods or the provision of services, before any expenses are deducted.

Variable Costs

Variable expenses directly linked to the operational scale of a business.

Variable Costing

Variable costing is an accounting approach that includes only variable production costs (materials, labor, and overhead) in product costs, omitting fixed costs.