Which One of the Following Best Describes the Primary Advantage

question 36

Multiple Choice

Which one of the following best describes the primary advantage of being a limited partner rather than a general partner?

• A)No potential financial loss
• B)Liability for firm debts limited to the capital invested
• C)Entitlement to a larger portion of the partnership's income
• D)Greater management responsibility
• E)Ability to manage the day-to-day affairs of the business

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Definitions:

Straight-Line Depreciation

A process for dividing the cost of an asset equally over the duration of its usability.

After-Tax Discount Rate

This rate is used to discount future cash flows to their present value, considering the effect of taxes.

Incremental Sales

The additional revenue generated from a specific marketing or sales effort, beyond the expected or baseline sales level.

Income Tax Rate

The segment of income that governments require individuals and corporations to pay as tax.