Ch.1: 1.2 : Financial Protection By A+S-- For Business

Question 1

Business Goals (x3)

Answer 1

• Profitability
• Succession
• Sale @ FMV

Question 2

Business Risk

Answer 2

Systemic (common)

Unsystematic (unique)

Question 3

Risk management (x2)

Answer 3

1. Self funding (risk retention)
   3 options:
   
   • pay w cash flow
   • borrow
   • erode savings/sell assets
2. INSURANCE– better

Question 4

Needs me by A+S

Answer 4

A+ S provides funds to keep biz afloat while biz owner/key employee recovers