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An entrepreneur has two plans. The first offers higher potential profit but a loss could close the business. The second offers lower profit with controlled risk. Which factor should receive priority?

Answer and explanation

Correct answer: The business's risk capacity and continuity

A decision should fit the business’s risk-bearing capacity. If one adverse result can eliminate the business, the plan threatens continuity even if its possible profit is high. The entrepreneur should compare probabilities, downside, cash reserves, and recovery ability, not just the best outcome. Controlled risk may better support survival and future growth. Thus A is correct.

Related tags

Risk-CapacityBusiness-ContinuityIntroduction To EntrepreneurshipEntrepreneurial Skills IArtificial IntelligenceClass 9 Mcq

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