Kimberly Jones is the founder of a company in the medical equipment industry. Kimberly's firm is still in the feasibility analysis stage and doesn't have a product that is ready to sell. The company is spending about $25,000 per month and expects to maintain that level of spending until it reaches profitability. The $25,000 a month is Kimberly's:

Question

Quizplus · Accepted Answer

The term "burn rate" refers to the rate at which a firm is spending its capital without generating revenue. In this scenario, Kimberly's company is spending $25,000 per month without any product to sell yet, so the appropriate term is burn rate. "Consumption rate" and "usage rate" do not accurately describe a company's spending habits, "utilization rate" typically refers to the percentage of time that an asset is being used, and "liquidity rate" refers to a company's ability to meet its financial obligations.

Kimberly Jones Is the Founder of a Company in the Medical