Tyler Would Like to Own a Train Store and Operate

question 149

Multiple Choice

Tyler would like to own a train store and operate it by himself.He has enough money to open it and operate it on his own and elects to do so.What form of business is this?

• A) Sole proprietorship.
• B) Partnership.
• C) LLC.
• D) S-corporation.

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Definitions:

Depreciation

The monetary value decrease of an asset over time due to use, wear and tear, or obsolescence.

Perpetuity Growth Rate

The steady rate at which the cash flows from a perpetuity are expected to grow indefinitely.

Terminal Value

Terminal Value is an estimate of a business's value in the future when it is expected to have stable growth; often used in discounted cash flow (DCF) analyses to estimate a company’s valuation at a specified future point.

Inflation Rate

A measure of the rate at which the general level of prices for goods and services is rising, and subsequently, purchasing power is falling.