Which of the Following Statements Is True of the Financials

question 17

Multiple Choice

Which of the following statements is true of the financials section of a business plan?

• A) A typical financials section for investors has two subsections: organizational structure and R& D plans.
• B) The critical risks subsection addresses existing investments and the current ownership situation.
• C) The assumptions subsection explains computations,inclusion or exclusion of items,and any other special considerations.
• D) The deal subsection mentions the parts of the business that exposes the firm to loss.

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Definitions:

Predetermined Overhead Rate

A rate used to allocate manufacturing overhead to individual products or job orders, based on a predetermined activity base.

Direct Labor Cost

The wages and related expenses for employees who are directly involved in the production of goods or services.

Factory Labor Costs

Expenses associated with employing labor in a manufacturing setting, including wages, salaries, and benefits.

Manufacturing Overhead

All manufacturing costs other than direct labor and direct materials that are involved in the creation of a product.