An Investor Is Considering Buying a Restaurant That Has Been

question 22

Multiple Choice

An investor is considering buying a restaurant that has been in operation for a number of years. The restaurant has a highly regarded chef,and many long-term kitchen and wait staff who work together smoothly. It has a reputation for dishes of consistently high quality and an appealing dining atmosphere. What should the investor consider when making a decision?

• A)The investor will find that the success of this restaurant is so heavily based on human resources that the business will likely be subject to inertia in the future.
• B)The investor will find that the restaurant's financial statements undervalue the true value of its resources.
• C)The investor should be aware that intangible assets are difficult to leverage into additional business.
• D)The investor should search for a firm which has competitive advantages based on tangible resources.

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Definitions:

Negotiation

A strategic discussion that resolves an issue in a way that both parties find acceptable.

Marginally Ethical Tactics

Strategies that are close to the boundaries of ethical standards, potentially controversial in terms of morality.

Negotiators

Individuals engaged in negotiation, working towards reaching agreements or resolving disputes between parties.

Appropriate

Suitable or proper in the context of the circumstances or requirements.