Which of the Following Is Considered a Disadvantage of Buying

question 24

Multiple Choice

Which of the following is considered a disadvantage of buying an existing business?

• A) Acquiring a "going concern" with a good past history increases the likelihood of a successful operation for the new owner.
• B) Has an established clientele.
• C) Established relationships with banks, trade creditors, and other sources of financial support.
• D) Present personnel may be unproductive and have a poor track record.

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Definitions:

Perfect Information

A situation in decision-making where all participants have access to all relevant facts and data.

Expected Profit

The forecasted gain or loss from a business activity, considering possible outcomes and their probabilities.

Certainty

The state or quality of being absolutely sure or confident about something, without any doubt.

Perfect Information

A market condition in which all participants are fully informed about the product, prices, and other relevant factors.