Which of the Following Is Considered a Disadvantage of Buying

question 24

Multiple Choice

Which of the following is considered a disadvantage of buying an existing business?

• A) Acquiring a "going concern" with a good past history increases the likelihood of a successful operation for the new owner.
• B) Has an established clientele.
• C) Established relationships with banks, trade creditors, and other sources of financial support.
• D) Present personnel may be unproductive and have a poor track record.

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Definitions:

Emissions Permit

A legal right granted by a government to emit a certain amount of pollutants into the atmosphere; often used in cap and trade programs.

Refundable Deposit

An amount of money given as security for an item that is intended to be returned, with the promise of repayment.

Marginal Private Cost

The change in a firm's total costs that comes from making one additional unit, considering only private costs without externalities.

Abatement Cost

The cost associated with reducing or eliminating negative environmental impacts, such as pollution.