All categories

3 years ago

Which of the following is a con of buying a franchise?

Business

1 answer:

kipiarov [429]3 years ago

8 0

Answer:

A con of buying a franchise is limited business control and creativity.

Explanation:

A franchise is an authority by a company or government to an individual or groups of people to enable them to conduct specified business activities. It is a kind of license to utilize and have access to specific knowledge about a company or organization. The entity that can purchase the franchise at a certain cost depending on the value of the franchise, in return he/she gets a license to use the franchise within the threshold of the licensing agreement.

Purchasing a franchise has it's advantages and disadvantages.One major advantage is; since buying a franchise involves buying the right to use a company's name, this is beneficial since there is a ready-made business operation. On the other hand, franchise has also a disadvantage. The major disadvantage of buying a franchise is that there is no business control since one has limited creativity with the product. The franchise always has a certain in built brand, limiting the ability of the person buying the franchise to be creative with adding or taking from the franchise.

You might be interested in

If you wish to have $60,000 in 8 years, how much do you need to deposit in the bank today if the account pays an interest rate o

liberstina [14]

Answer:

PV= $30,111.98

Explanation:

Giving the following information:

Future value= $60,000

Number of periods= 8

Interest rate= 9%

<u>To calculate the initial investment, we need to use the following formula:</u>

FV= PV*(1+i)^n

<u>Isolating PV:</u>

PV= FV/(1+i)^n

PV= 60,000 / 1.09^8

PV= 30,111.98

5 0

4 years ago

Western shores is comparing two separate capital structures. the first structure consists of 260,000 shares of stock and no debt

Bas_tet [7]

Let the price per share of the equity be $ X

Capital structure 1 -

All equity financed, = 260,000 shares * $ X

Capital structure 2 -

Equity + Debt financed = 210,000 shares * $ X + $ 1,500,000

Since, there is a need to compare the two capital structures, thus -

Capital structure 1 = Capital structure 2

260,000 shares * $ X = 210,000 shares * $ X + $ 1,500,000

50,000 X = $ 1,500,000

X = $ 30

Thus, the price of equity = $ 30 per share

5 0

3 years ago

Read 2 more answers

Arrange the types of investments in the correct order from the least risky to the most risky investment.

kotegsom [21]

Bonds will be the least risky since there is no risk involved at all. Bonds give out guaranteed payments and A rated bonds will be even more secure.

The next would be property. Since property is a physical asset, the risk involved is relatively lower than stocks.

The next would be retirement plans which would typically have bonds and stocks.

The most risky would be speculative stocks.

The order from least risky to most risky would be:

1. A rated bonds

2. Property

3. Retirement plans

4. Speculative stocks

6 0

3 years ago

A company could improve its acid-test ratio by selling some equipment it no longer needs for cash. a. True b. Flase

kari74 [83]

Answer:

true

Explanation:

acid test ratio can be calculate by ( Current assets – Inventory ) / Current liabilities. Ideally, the acid test ratio should be 1:1 or higher, however this varies widely by industry. In general, the higher the ratio, the greater the company's liquidity. by selling up equipment in exchange of cash, the will assist the company to be able to handle its current liability with the cash injection into the entity.

3 0

3 years ago

Which of these credit card payback strategies would result in your paying the HIGHEST amount of interest?

alukav5142 [94]

Answer:

D. Making the minimum payment (3% credit card balance) every month with an occasional late payment

Explanation:

Credit card debts attract a very high-interest rate. By design, the interest on uncleared balances increases rapidly. Credit cards calculate interest monthly. Any uncleared balance and the interest incurred is rolled over to the next month, where it continues attracting more interest.

The best strategy is to clear credit card debts in the month they are incurred. Late payment attracts heavy penalties. A combination of late payments and outstanding balances will make interest charges grow exponentially.

5 0

3 years ago