Ben Has Been Thinking About Going into Business

question 94

Multiple Choice

Ben has been thinking about going into business. However, he has discounted entering automobile manufacturing because it

• A) requires little skill and knowledge.
• B) is not a part of the production industry.
• C) requires huge investments in machinery and equipment.
• D) is unprofitable.
• E) requires by law a corporate form of business.

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Definitions:

Corporate Tax Rate

The percentage of corporate income that companies are required to pay to the government as tax.

EBIT

A profitability metric that accounts for all of a company's expenses except for interest and income taxes, reflecting the firm's profit.

Accounts Receivable

sums of money owed to a company by customers for goods or services delivered or used but not yet paid for.

Inventory

The total amount of goods and materials held by a business for the purpose of resale, production, or repair.