Creating Projected (Pro Forma)financial Statements Would Allow a Business Owner

question 82

Multiple Choice

Creating projected (pro forma) financial statements would allow a business owner to answer which of the following questions?

• A)What profit can my business expect to achieve?
• B)What sales level must my business reach if our targeted profit is X dollars?
• C)What fixed and variable expenses can my business expect to incur at our targeted sales level?
• D)All of the above

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Definitions:

Rent-seeking Activity

Actions by individuals or firms to increase their own wealth without creating new wealth or value for society.

Taxing

The act of imposing charges on individuals or entities by the government in order to finance public spending and services.

Benefits

The advantages or positive outcomes that accrue from actions, activities, or projects, often used in evaluating decisions.

Shortsightedness Effect

The tendency of policy makers or individuals to prioritize immediate benefits or gains over long-term interests and consequences, often leading to suboptimal outcomes.