Debt Financing by a Franchisee Is Typically Found in Two

question 7

Multiple Choice

Debt financing by a franchisee is typically found in two forms

• A)selling part of the ownership to partners and funds granted from family and friends
• B)selling part of the ownership to partners and bank financing for working capital
• C)funds granted to franchisee from family and friends and bank financing for working capital
• D)borrowing money for working capital and for financing capital expenditures.

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Definitions:

$M

A shorthand notation for million dollars, used mainly in financial contexts to denote monetary values.

Interest Rate

The percentage charged on borrowed money, reflecting the cost of borrowing or the gain from saving.

Capital Projects

Large-scale investment projects that require significant amounts of capital, typically in infrastructure, buildings, or technology, aiming for long-term benefits.

Present Value

The current worth of a future sum of money or stream of cash flows given a specified rate of return, used in discounting to address the time value of money.