Susan started a cake decorating business that failed. She is convinced that she lacked the necessary funds to promote her business and get it off the ground. Susan experienced:
A) inadequate financial control.
B) undervalued inventory.
C) undercapitalization.
D) a cash flow issue.

Question

Quizplus · Accepted Answer

Undercapitalization refers to a situation where a business does not have enough funds to operate effectively. Susan's belief that she lacked the necessary funds to promote her business is a clear indication of undercapitalization. This means that she did not have sufficient capital to invest in the necessary resources and assets to make her business successful.

Susan Started a Cake Decorating Business That Failed