2.05 Business Essentials

Front

People who go into business know that the business may not succeed. This possibility is referred to as business

Back

risk

Front

The general classifications of business risks are

Back

hazard, operational, strategic, and financial.

Front

A hurricane that destroys a business is an example of a(n) __________ risk.

Back

hazard

Front

A garden store customer tripped over a plant, fell, and sued the store for damages. This is an example of a(n) __________ risk.

Back

hazard

Front

A union strike that stops production at a manufacturing plant is a(n) __________ risk.

Back

operational

Front

What category of business risk includes production problems and incompetent employees?

Back

Operational

Front

When a rival’s product on the market reduces sales of your company’s product, your company is experiencing strategic risk caused by

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competition.

Front

Financial loss from investing time and money to comply with accounting standards is an example of which strategic risk?

Back

Regulatory and political issues

Front

Which of the following is a pure business risk: Robbery, Obsolescence, Competition, Inflation

Back

Robbery

Front

Which of the following is an example of a business risk that cannot be covered by insurance: Increase in interest rates, Goods lost in transit, Destruction of building by fire, Injury of employee on the job

Back

Increase in interest rates