Question

Samantha has a bakery that has been successfully run for over a year, and it’s growing in popularity. If she planned to use her profits in order to merely cover the same costs she had in the previous year, what risk is she most likely taking? Group of answer choices might not be able to pay her taxes might not be able to attract essential new investors might lose customers because of a lack of innovation might not be able to keep up with increased demand

Answer 1

Samantha risks losing customers due to a lack of innovation by only using profits to cover previous costs, not accounting for market changes or inflation, and potentially facing financial difficulties.

Step-by-step explanation:

If Samantha uses her profits solely to cover the same costs as the previous year, the risk she is most likely taking is that she might lose customers because of a lack of innovation. Businesses typically need to invest in new products, marketing efforts, and improvements to stay competitive and appeal to their customer base. If Samantha's bakery does not adapt to changing market trends or customer preferences, customers might start looking elsewhere for innovative and updated product offerings.

Moreover, simply aiming to cover past costs does not account for possible increases in costs due to inflation or unexpected events, leading to potential financial difficulties. The bakery needs to forecast and adjust for the years ahead, which may mean setting aside profits for future expenses or investment in development.