Answer:
<em>A proprietorship has three important advantages: </em>
(1) It is easily and inexpensively formed,
(2) it is subject to few government regulations, and
(3) it is subject to lower income taxes than are corporations.
<em>However, a proprietorship also has three important limitations: </em>
(1) A proprietor has personal liability for the business' debts.
(2) The life of the business is limited to the life of the individual who created it.
(3) A proprietorship has difficulty obtaining large sums of capital so proprietorships are used primarily for small businesses.
As all company structures, proprietorships have both advantages and disadvantages. Although the advantages mainly relate to feasibility, the disadvantages are often overlooked. The main disadvantage is the total liability of the owner, which is detrimental if the business faces tough times, which lead to liquidation.
Answer: c) investment opportunities with superior returns.
Explanation:
Answer:
Original cost of the stock = $23.16
Explanation:
Original cost of the stock = Selling price of stock / ( 1 + r )^n
Original cost of the stock = $50 / (1+8%)^10
Original cost of the stock = $50 / (1.08)^10
Original cost of the stock = $23.16
Answer:
18.5%
Explanation:
The formula to compute the average rate of return is shown below:
= Annual net income ÷ average investment
where,
Annual net income equal to
= Expected total net income ÷ number of years
= $240,000 ÷ 4
= $60,000
And, the average investment would be
= (Initial investment + salvage value) ÷ 2
= ($650,000 + $0) ÷ 2
= $4650,000 ÷ 2
= $325,000
Now put these values to the above formula
So, the rate would equal to
= $60,000 ÷ $325,000
= 18.5%
A) a proprietorship is the most common type of firm in the United States.
