The ________ Test That a Business Plan Must Pass in Order

question 70

Multiple Choice

The ________ test that a business plan must pass in order to attract financing from lenders and investors involves proving that a market for the company's product or service actually does exist and that the company actually can build it for the cost estimates included in the plan.

• A) reality
• B) competitive
• C) value
• D) profitability

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating the short-term financial health and operational efficiency of the business.

Dividend

A portion of a company's earnings, decided by the board of directors, to be distributed among shareholders, typically in the form of cash payments or additional shares.

Net Profits

The amount of money left over after all expenses, taxes, and deductions are subtracted from a company's total revenue.

Compensating Balance

A minimum account balance that a company agrees to maintain in a bank in return for banking services.