A Disadvantage of the Sole Proprietorship Form Is Often

question 305

Multiple Choice

A disadvantage of the sole proprietorship form is often:

• A) business profits are taxed to the owner personally
• B) the owner is personally liable for all the business debts
• C) the owner has sole responsibility for control, liabilities, and management
• D) the record keeping formalities of the business are within the owner's discretion
• E) none of the other choices

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Definitions:

Utility

The measure of satisfaction or value that an individual derives from consuming goods and services.

Risk-neutral

A characteristic of individuals or entities who are indifferent to risk when making investment decisions, focusing solely on the expected returns.

Risk-loving

A characteristic of an individual or entity that prefers or is willing to take actions that have a high level of uncertainty with the potential for significant returns.

Expected Utility

A theory in economics that calculates the anticipated utility of an action, factoring in all possible outcomes weighted by their probabilities.