Explain briefly a business risk.

Question

Want to see more full solutions like this?

Answer 1

Question

100%

Chapter 1, Problem 1RC

To determine

Explain briefly a business risk.

Expert Solution & Answer

Explanation of Solution

Business risk:

Business risk refers to the chances or probability of occurrence of such events which will lower the expected profitability of a business.

In other words, business risk can be defined as the chance where the business fails to achieve its desired objectives. For example, a company may lose its customers if the competitor introduces an innovative product.

Information risk is a type of business risk which may affect business adversely. For instance, all business decisions are based on information. If a misleading information floats in a company then a company may take a wrong decision that will affect company’s profitability in future.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

Amy is evaluating the cash flow consequences of organizing her business entity SHO as an LLC (taxed as a sole proprietorship), an S corporation, or a C corporation. She used the following assumptions to make her calculations: a) For all entity types, the business reports $22,000 of business income before deducting compensation paid to Amy and payroll taxes SHO pays on Amy's behalf. b) All entities use the cash method of accounting. c) If Amy organizes SHO as an S corporation or a C corporation, SHO will pay Amy a $5,000 annual salary (assume the salary is reasonable for purposes of this problem). For both the S and C corporations, Amy will pay 7.65 percent FICA tax on her salary and SHO will also pay 7.65 percent FICA tax on Amy's salary (the FICA tax paid by the entity is deductible by the entity). d) Amy's marginal ordinary income tax rate is 35 percent, and her income tax rate on qualified dividends and net capital gains is 15 percent. e) Amy's marginal self-employment tax rate is…

Information pertaining to Noskey Corporation’s sales revenue follows: November 20X1 (Actual) December 20X1 (Budgeted) January 20X2 (Budgeted)Cash sales $ 115,000 $ 121,000 $ 74,000Credit sales 282,000 409,000 208,000Total sales $ 397,000 $ 530,000 $ 282,000Management estimates 5% of credit sales to be uncollectible. Of collectible credit sales, 60% is collected in the month of sale and the remainder in the month following the month of sale. Purchases of inventory each month include 70% of the next month’s projected total sales (stated at cost) plus 30% of projected sales for the current month (stated at cost). All inventory purchases are on account; 25% is paid in the month of purchase, and the remainder is paid in…

Mirror Image Distribution Company expects its September sales to be 20% higher than its August sales of $163,000. Purchases were $113,000 in August and are expected to be $133,000 in September. All sales are on credit and are expected to be collected as follows: 40% in the month of the sale and 60% in the following month. Purchases are paid 20% in the month of purchase and 80% in the following month. The cash balance on September 1 is $23,000. The ending cash balance on September 30 is estimated to be:

Answer 2

Question

100%

Chapter 1, Problem 1RC

To determine

Explain briefly a business risk.

Expert Solution & Answer

Explanation of Solution

Business risk:

Business risk refers to the chances or probability of occurrence of such events which will lower the expected profitability of a business.

In other words, business risk can be defined as the chance where the business fails to achieve its desired objectives. For example, a company may lose its customers if the competitor introduces an innovative product.

Information risk is a type of business risk which may affect business adversely. For instance, all business decisions are based on information. If a misleading information floats in a company then a company may take a wrong decision that will affect company’s profitability in future.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 3

Question

100%

Chapter 1, Problem 1RC

To determine

Explain briefly a business risk.

Expert Solution & Answer

Explanation of Solution

Business risk:

Business risk refers to the chances or probability of occurrence of such events which will lower the expected profitability of a business.

In other words, business risk can be defined as the chance where the business fails to achieve its desired objectives. For example, a company may lose its customers if the competitor introduces an innovative product.

Information risk is a type of business risk which may affect business adversely. For instance, all business decisions are based on information. If a misleading information floats in a company then a company may take a wrong decision that will affect company’s profitability in future.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 4

Question

100%

Chapter 1, Problem 1RC

To determine

Explain briefly a business risk.

Expert Solution & Answer

Explanation of Solution

Business risk:

Business risk refers to the chances or probability of occurrence of such events which will lower the expected profitability of a business.

In other words, business risk can be defined as the chance where the business fails to achieve its desired objectives. For example, a company may lose its customers if the competitor introduces an innovative product.

Information risk is a type of business risk which may affect business adversely. For instance, all business decisions are based on information. If a misleading information floats in a company then a company may take a wrong decision that will affect company’s profitability in future.

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Question

100%

Answer 6

Question

100%

Answer 7

Chapter 1, Problem 1RC

To determine

Explain briefly a business risk.

Expert Solution & Answer

Explanation of Solution

Business risk:

Business risk refers to the chances or probability of occurrence of such events which will lower the expected profitability of a business.

In other words, business risk can be defined as the chance where the business fails to achieve its desired objectives. For example, a company may lose its customers if the competitor introduces an innovative product.

Information risk is a type of business risk which may affect business adversely. For instance, all business decisions are based on information. If a misleading information floats in a company then a company may take a wrong decision that will affect company’s profitability in future.

Answer 8

Chapter 1, Problem 1RC

To determine

Explain briefly a business risk.

Expert Solution & Answer

Explanation of Solution

Business risk:

Business risk refers to the chances or probability of occurrence of such events which will lower the expected profitability of a business.

In other words, business risk can be defined as the chance where the business fails to achieve its desired objectives. For example, a company may lose its customers if the competitor introduces an innovative product.

Information risk is a type of business risk which may affect business adversely. For instance, all business decisions are based on information. If a misleading information floats in a company then a company may take a wrong decision that will affect company’s profitability in future.

Answer 9

Chapter 1, Problem 1RC

To determine

Explain briefly a business risk.

Answer 10

Expert Solution & Answer

Explanation of Solution

Business risk:

Business risk refers to the chances or probability of occurrence of such events which will lower the expected profitability of a business.

In other words, business risk can be defined as the chance where the business fails to achieve its desired objectives. For example, a company may lose its customers if the competitor introduces an innovative product.

Information risk is a type of business risk which may affect business adversely. For instance, all business decisions are based on information. If a misleading information floats in a company then a company may take a wrong decision that will affect company’s profitability in future.