Buying an Established Business Is a Better Plan Than Starting

question 128

Multiple Choice

Buying an established business is a better plan than starting your business from scratch because:

• A) you have more creative freedom.
• B) you can choose your stakeholders.
• C) the organizational structure is in place.
• D) the chance of first-year failure is zero.

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Definitions:

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.

Capital Expenditures

Long-term investments in physical assets such as property, plants, and equipment.

Net Cash

The amount of cash available after accounting for cash inflows and outflows.

Net Income

The total revenue minus total expenses, indicating the profit earned by a business during a specific period.