Answer:
Winston took a very good decision.
Explanation:
If Winston is making economic profit then the decision is good
Economic profit=Total revenue-implicit cost - explicit costs
where,
implicit cost= opportunity cost of best alternative and explicit cost is accounting costs
=150000-(60000+4000)-8000
=78.000
The economic profit is positive, a good indicator that Winston took a good decision.
Answer: C. Favorable endorsements from customers' peers
Explanation: Fine and funky's objective to build trust and loyalty among its target group (women aged 35-55 years) will only be achieved within it's target group. Hence, getting a favourable endorsement from her customers' peers will help her achieve this.
Answer:
it must be organized as a separate legal entity.
Explanation:
A corporation is a business that is owned by shareholders. The corporation is a separate legal entity and so it can sue and be sued, pay taxes and own assets.
Advantages of a corporation include :
1. they have unlimited liabilities
2. they have unlimited life. the business doesn't end even after the death of the owners unlike a sole proprietorship
3. they have more access to capital
Disadvantages of a corporation include :
- high cost of setting up
- Earnings to shareholders are taxed twice
A corporation can only issue one type of share
A corporation is under no obligation to pay dividends
Stocks of a corporation can either be sold in large or small amounts
