A Disadvantage of Buying an Existing Business Is That Operating

question 39

True/False

A disadvantage of buying an existing business is that operating processes and policies have already been established.This means that it is a riskier purchase than the purchase of a franchise.

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Definitions:

Market Value

The current price at which an asset or service can be bought or sold in a public marketplace.

Realized Gains

Profit from the sale or exchange of an asset that exceeds its purchase price.

Investments

Assets purchased with the expectation that they will generate income or will appreciate in value in the future.

Stockholders' Equity

The residual interest in the assets of a corporation after deducting liabilities, typically represented by common stock, preferred stock, and retained earnings.