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One Potential Problem with Acquiring Funds from Friends and Relatives

question 64

True/False

One potential problem with acquiring funds from friends and relatives is that they might feel they have the right to interfere in the management of the business.


Definitions:

Larger Bequest

Pertains to a greater amount of money or property left to someone in a will, highlighting the concept in inheritance and estate planning.

Marginal Tax-Rate

The rate at which the next dollar of taxable income is taxed.

Substitution Effect

The change in consumption that results when a price change moves the consumer along a given indifference curve to a point with a new marginal rate of substitution.

Income Effect

The change in consumption that results when a price change moves the consumer to a higher or lower indifference curve

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