The Reality Test That a Business Plan Must Pass in Order

question 88

Multiple Choice

The reality test that a business plan must pass in order to attract financing from lenders and investors involves proving:

• A) that the company can gain a competitive advantage over its key competitors.
• B) that the business venture will provide lenders and investors a high probability of repayment or an attractive rate of return.
• C) that a market for the company's product or service actually does exist and that the company can actually build it for the cost estimates included in the plan.
• D) that the industry in which the business will compete is growing faster than the overall economy and has room for more competitors.

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Definitions:

Restatement Of Torts

A legal treatise published by the American Law Institute summarizing the general principles of common law torts in the United States.

Manufacturing Defects

Flaws or imperfections in a product that arise from the manufacturing process, resulting in the product deviating from its intended design or specifications.

402A

A section of the Restatement (Second) of Torts in the United States, making manufacturers and sellers liable for harm caused by defective products.

Warranty Of Title

A guarantee that the seller has the right to sell the property and that it is free from liens or other encumbrances.