An LLC's Limitation on Liability Will Not Affect the Liability

question 46

Multiple Choice

An LLC's limitation on liability will not affect the liability of a member who:

• A) committed the wrongful act giving rise to the liability.
• B) guaranteed the obligation.
• C) Both of these.
• D) None of these.

Explain the role of correlated and independent risks in investment strategies and risk reduction.

Understand the concept of adverse selection and its impact on the market.

Grasp the concept of moral hazard and how it influences individual and business actions.

Identify solutions to mitigate the problems of adverse selection and moral hazard.

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Definitions:

Accounting Break-even

The moment when the sum of all costs equals the total revenue, which means there is no net gain or loss.

Operating Cash Flow

Cash generated by a company’s normal business operations.

Fixed Costs

Fixed outgoings that are unaffected by production or sales volumes, such as renting costs, salary payments, and insurance expenses.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.