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If a Sole Proprietorship Fails,the Owner Is Not Liable for Its

question 46

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If a sole proprietorship fails,the owner is not liable for its debts since the business is a separate legal entity.


Definitions:

Risk-Free Rate

The theoretical return on an investment with no risk of financial loss, often represented by the yield on government bonds.

Project Life

The duration over which a project is expected to operate or be active, from commencement to completion.

Cost of Debt

The effective rate that a company pays on its borrowed funds from loans or bonds.

Cost of Equity

The return a company must offer investors to compensate for the risk of investing in its stock, usually estimated using models like the Capital Asset Pricing Model (CAPM).

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