Which of the Following Is NOT a Reason Why a Private

question 7

Multiple Choice

Which of the following is NOT a reason why a private enterprise may be acquired as a bargain purchase?

• A)The business only has equity financing and has no debt financing.
• B)It is a family business and the next generation does not want to continue the business.
• C)The owner has health problems and does not have a successor.
• D)The owner is no longer interested in the business.

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Definitions:

Average Tax Rate

The ratio of the total amount of taxes paid to the total tax base (taxable income or spending), showing the fraction of income that is paid in taxes.

Licensing Fees

Payments made by a user to an owner for the right to use intellectual property, such as patents, trademarks, or copyright material.

Ability-To-Pay Principle

A principle of taxation asserting that taxes should be levied according to an individual’s or entity’s capacity to pay.