The Reality Test That a Business Plan Must Pass to Attract

question 120

Multiple Choice

The reality test that a business plan must pass 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:

Production

The process of creating, growing, manufacturing, or improving goods and services.

Manufacturing Overhead

All indirect costs associated with the production process, such as utilities, maintenance, and factory management salaries.

Raw Materials Transactions

Raw materials transactions involve the recording and tracking of purchases, usage, and inventory levels of raw materials in a manufacturing or production process.

November

The month that comes after October and before December in the Gregorian calendar, known as the eleventh month.