1. Which of the following statements is true about business plans?
A business plan is useful only in case of exigency in the business environment otherwise a business plan is not important.
A well-prepared business plan always avoids contingent liabilities as the plan helps to predict and change the occurrence of a contingent liability.
A well-prepared business plan makes it easier for an entrepreneur to communicate to potential investors precisely what returns an investor might expect to receive.
A business plan is a trivial part in the overall strategy formulation and its impact on business operations in the long run is miniscule.
2. Warren Soft makes period pieces. The firm has total fixed costs of $500,000. The average piece is sold at a price of $2,500 and involves variable costs of $1,800 per unit. What is the break-even point for this firm? (Round to nearest whole unit.)
714 pieces
738 pieces
928 pieces
617 pieces