John Blue Has Started His Own Internet Business, Blueways

question 103

Multiple Choice

John Blue has started his own Internet business, Blueways.com, offering online ordering of refurbished computer parts. His business has experienced a slower-than-usual start, due to higher-than-expected costs for capital resources. Which expenses are most likely involved?

• A) buildings, money, and skilled labour
• B) raw materials, money, and employee training
• C) computers, cables, Internet router, copiers, and software
• D) advertising and financial costs

Understand the key characteristics of sole proprietorships, including their size, liability, and control.

Recognize the advantages and disadvantages of sole proprietorship in comparison to other forms of business ownership.

Identify the forms of business that provide owners with limited liability.

Understand the impact of business ownership forms on control, decision-making, and regulatory obligations.

---

Definitions:

Debt

A sum of money lent by one party to another, which has to be repaid at a future date, typically with added interest.

Debt Ratio

A ratio that evaluates how much a business relies on debt financing, calculated through the division of the company's total liabilities by its total assets.

Interest Rate

The amount charged by lenders to borrowers for the use of assets, expressed as a percentage of the principal.

ROE

Return on Equity (ROE) is a financial ratio that measures the profitability of a company in relation to the equity of its shareholders.