One Advantage of Buying an Existing Business Instead of a Franchise

question 31

True/False

One advantage of buying an existing business instead of a franchise is that an existing business already has an established cash flow.

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Definitions:

Pure Play Approach

An investment strategy focusing on companies that specialize in a specific industry sector or product, minimizing diversification to capitalize on sector strengths.

Cost Of Capital

The profit percentage a firm has to secure on its investments to uphold its market valuation and lure funding.

Preferred Stock

A class of ownership in a corporation that has a higher claim on its assets and earnings than common stock.