A Franchisor Discloses a Cautionary Statement That Reads, "Caution: These

question 36

Multiple Choice

A franchisor discloses a cautionary statement that reads, "Caution: These figures are only estimates of what we think you may earn. There is no assurance you'll do as well. If you rely upon our figures, you must accept the risk of not doing so well." This is an instance of ________.

• A) disclosure of earning projections based on actual data
• B) disclosure of earning projections based on hypothetical data
• C) nondisclosure of sales or earnings projections
• D) fraudulent disclosure by the franchisor

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Definitions:

Operating Departments

Departments in a company directly involved in its core business activities, contributing to the production of its goods or services.

Fixed Element

A cost that does not change in total with changes in the volume of activity, remaining constant regardless of changes in levels of output or sales.

Power Costs

The expenses associated with the electricity used by a business for its operations.

Operating Departments

Units or divisions within an organization that are directly involved in its primary revenue-generating activities.