5.4 - Contingencies
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Practice Questions
Test your understanding with targeted questions
What are contingencies in business finance?
💡 Hint: Think about what a backup plan means.
Why is it important for businesses to have contingency funds?
💡 Hint: Consider emergencies as part of business operations.
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Interactive Quizzes
Quick quizzes to reinforce your learning
What are contingencies?
💡 Hint: Think about what becomes necessary when something unplanned happens.
True or False: Contingency funds can only be used for legal issues.
💡 Hint: Look at all potential unexpected events.
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Challenge Problems
Push your limits with advanced challenges
A startup optimistically budgets its finances but neglects contingencies, leading to a halt in operations due to unexpected equipment failure. Describe the immediate and long-term financial impacts this could have.
💡 Hint: Consider both short-term operational impacts and implications on trust and future financing.
Analyze the steps a large company should take to ensure adequate contingency funding is available during expansion. What factors should they consider?
💡 Hint: Think about how growth can introduce new challenges.
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Reference links
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