Which of the Following Is an Advantage of Starting a New

question 61

Multiple Choice

Which of the following is an advantage of starting a new business as a sole proprietorship?

• A)double taxation
• B)ease in setting up
• C)limited liability
• D)greater ability to raise funds

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Definitions:

WACC

Weighted Average Cost of Capital; a calculation of a firm's cost of capital where each category of capital is proportionately weighted.

Tax Rate

The percentage at which an individual or corporation is taxed, which can vary based on income level, type of income, and jurisdiction.

Decision Tree

A form of scenario analysis in which different actions are taken in different scenarios.

Abandonment Option

Allows a company to reduce the capacity of its output in response to changing market conditions. This includes the option to contract production or abandon a project if market conditions deteriorate too much.