Conflicts Are Likely to Arise in a Small Family-Owned Business

question 39

Multiple Choice

Conflicts are likely to arise in a small family-owned business when:

• A) each family member has a different perspective, leading to dissension.
• B) a family member is clearly in command, at least in a given area of management.
• C) the role of each family member is distinct, based on sound business practices.
• D) family members agree to disagree and set ground rules.

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Definitions:

Economic Cost

The total cost of choosing one action over another, including both explicit costs (direct payments) and implicit costs (opportunity costs).

Uninsurable Risks

Risks that are too unpredictable or certain to occur, making it impossible for insurance companies to accurately price or offer coverage.

Nominal Rate of Interest

The rate of interest before adjustments for inflation, reflecting the market rate at which money can be borrowed.

Inflation Rate

The percentage increase in the price level of goods and services in an economy over a period of time, usually a year.