Question

Entrepreneurs often underestimate the financial requirements of launching a business or the amount of time required for the company to be self-sustaining. This refers to:

Answer 1

The correct answer is: under-capitalization.

Step-by-step explanation:

Under-capitalization refers to the state in which a company runs out of money to pay its creditors pushing them to request loans from financial institutions. Normally, this situation arises when the firm did not outline a correct budget to keep the business up and running or incurred in operations that were not part of it.