Why is estimating profit and loss necessary for an entrepreneur?
Answer and explanation
Correct answer: To make sound financial decisions
Estimating profit and loss requires comparing expected revenue with expected costs. It helps an entrepreneur judge whether the idea may be viable, set prices, control spending, plan finance and decide whether to expand or change operations. Option A is correct. The estimate is meant to support informed decisions, not remove customers or encourage careless spending.
Frequently asked questions
What is the correct answer to this question?
To make sound financial decisions
Why is this the correct answer?
Estimating profit and loss requires comparing expected revenue with expected costs. It helps an entrepreneur judge whether the idea may be viable, set prices, control spending, plan finance and decide whether to expand or change operations. Option A is correct. The estimate is meant to support informed decisions, not remove customers or encourage careless spending.
Which subject and chapter does this question cover?
This is a Class 11 Business Studies question. Chapter: Sources of Business Finance. Topic: Concept, nature and importance of business finance.
