A Private Placement Sale Can Be More Flexible in Structure

question 22

True/False

A private placement sale can be more flexible in structure to meet an entrepreneur's needs even though the entrepreneur cannot sell shares immediately.

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Definitions:

Selling Price

The amount of money charged for a product or service, or the sum a customer is willing to pay.

Fixed Manufacturing Cost

Expenses that do not change with the volume of production, such as rent, salaries, and insurance costs related to manufacturing facilities.

Relevant Range

The range of activity within which the assumptions about fixed and variable cost behaviors hold true.

Variable Cost

Costs that vary directly with the level of production or service provision, such as materials, labor, and utilities consumed in the production process.