What Is a Major Drawback of Sole Proprietorships

question 18

Multiple Choice

What is a major drawback of sole proprietorships?

• A) Short-term focus of shareholders
• B) Work flexibility
• C) Low start-up costs
• D) Unlimited liability
• E) Structured hours

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Definitions:

Intellectual Capital

Refers to the intangible value of a business, representing the sum of its knowledge, skills, inventions, and connections.

Availability Heuristic

A mental shortcut that relies on immediate examples that come to mind when evaluating a specific topic, concept, method, or decision.

Representativeness Heuristic

A cognitive shortcut in which one makes judgments about the probability of an event based on how closely it matches one's stereotypes or expectations.

Anchoring and Adjustment Heuristic

A cognitive bias where individuals rely too heavily on an initial piece of information (the "anchor") when making decisions, adjusting insufficiently from this starting point.