In Order to Make an Intelligent Investment Decision,entrepreneurs Should

question 21

Multiple Choice

In order to make an intelligent investment decision,entrepreneurs should:

• A)limit their options to those business investments that are backed by the Canadian government.
• B)invest in businesses that have generated a stable rate of profit for at least ten years.
• C)invest only in business opportunities where it is possible to take an active role in management.
• D)do research to compare the risks of potential investments to their expected profits and find the right balance between profit and risk. Those companies with high risk also often possess the potential for high profits.Entrepreneurs must weigh risk and profit and find the right balance.

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Definitions:

Above-The-Line Deduction

Deductions from gross income that occur before the calculation of the taxpayer's adjusted gross income.

Adjusted Gross Income

An individual's total gross income minus specific deductions, crucial for determining taxable income and eligibility for certain tax benefits.

AGI

Adjusted Gross Income, calculated as gross income minus certain adjustments, serving as the basis for various tax calculations.

Self-Employment Tax

A financial charge on self-employed persons to fund their Social Security and Medicare benefits.