Compared to the C Corporation, the Limited Liability Company Is

question 212

Multiple Choice

Compared to the C corporation, the limited liability company is an attractive form of business ownership because

• A) even though it is a little more expensive to form, it has a longer life than the C corporation.
• B) a limited liability company permits one owner to own all the stock of the company, whereas a C corporation requires several owners.
• C) once formed, the limited liability company is a legal form of business ownership, worldwide, whereas the C corporation must file for corporate status in each nation it elects to do business.
• D) once formed, the limited liability company does not require the firm to hold annual meetings, and has the option to avoid double taxation.

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Definitions:

Capital Rationing

The practice of limiting investments or expenditures in new projects due to budget constraints or capital availability.

IRR

IRR (Internal Rate of Return) is a financial metric used to evaluate the profitability of an investment, representing the interest rate at which the net present value of cash flows from the investment is zero.

Initial Investments

The initial amount of money put into a project or venture at the start of its operation.

Cost of Capital

The rate of return that a company must pay to its capital providers, including both debt and equity, to finance its assets.