Connie's Corner Café Having Done the Culinary Classes at the Local College, Connie

question 51

Multiple Choice

Connie's Corner Café
Having done the culinary classes at the local college, Connie has decided to explore the idea of opening her own business, "Connie's Corner Café". She has found the ideal location next to the college. However, it appears that Connie will have to get some outside investors or bankers involved for the financial backing to get this venture off the ground. When she talked to her local bank manager, Mr. Johnson, he immediately asked for Connie's business plan. Connie knew she was in trouble because she didn't even know what a business plan looked like.

-Which of the following would represent Mr.Johnson's interest in Connie's business plan?

• A)Cash flow and cash cycle
• B)Growth rate
• C)Competitive advantage
• D)Amounts and schedules for returns

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Definitions:

Dollar Weighted

A method of measuring investment returns which accounts for the size and timing of cash flows into and out of the portfolio.

Time Weighted

A method of calculating investment returns that eliminates the effects of cash inflows and outflows on the performance.

Rate of Return

The gain or loss on an investment over a specified period, expressed as a percentage of the investment's initial cost.

Dollar-Weighted Return

A method of calculating an investment's return that takes into account the timing and amount of capital inflows and outflows.