Which of the Following Is an Advantage of Buying an Existing

question 84

Multiple Choice

Which of the following is an advantage of buying an existing business?

• A)You can identify competitors.
• B)You have access to current cash flow.
• C)You can identify suppliers.
• D)You will inherit employees.

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Definitions:

Spinoff

A method of divesting a business unit by setting it up as a separate company and giving its shares to stockholders in proportion to their holdings of the original firm. After the spinoff stockholders can trade the two stocks separately.

Bankruptcy Proceedings

Legal process initiated by an insolvent individual or company to receive relief from debt by reorganizing or liquidating assets.

Creditors

Entities or individuals that a company owes money to due to the provision of goods, services, or loans.

Reorganization

In bankruptcy, a plan to restructure the failing company so that it may continue in business.