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Critical Thinking: Assessing Market Demand

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Critical Thinking: Assessing Market Demand

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Questions and Answers

Which of the following is a characteristic of a financially feasible business venture?

Reliance on externally generated funds
High percentage of recurring revenue (correct)
Absence of an exit opportunity for investors
Inconsistent and slow growth in sales

What is an indicator of a business venture's financial feasibility?

Lack of an exit opportunity for investors
Inability to forecast income and expenses
Reliance on external funding
High percentage of recurring revenue (correct)

What is a key consideration when evaluating the financial feasibility of a business venture?

Steady and rapid growth in sales
Ability to forecast income and expenses (correct)
High percentage of recurring revenue
Availability of external funding

What is a drawback of a business venture that relies on externally generated funds to finance and sustain growth?

Lack of control over financial decisions (D) Signup and view all the answers

Which of the following is a characteristic of a financially unfeasible business venture?

Inability to forecast income and expenses (C) Signup and view all the answers

What is an advantage of a business venture with a high percentage of recurring revenue?

Improved ability to forecast income and expenses (A) Signup and view all the answers

Why is it essential to evaluate the financial feasibility of a business venture?

To assess the venture's potential for growth and profitability (D) Signup and view all the answers

What is a potential benefit of a business venture with an exit opportunity for investors?

Improved ability to attract investors (A) Signup and view all the answers

What is a characteristic of a financially feasible business venture?

High percentage of recurring revenue (D) Signup and view all the answers

Which of the following is a disadvantage of a business venture with an inability to forecast income and expenses?

Increased uncertainty in financial planning (D) Signup and view all the answers