Exam 1 1. Country A is extremely efficient in the mining of tin. However‚ its climate and terrain makes it difficult to produce corn. According to the theory of comparative advantage‚ Country A should: concentrate its production on tin and buy corn from an efficient producer. 2. Climate and terrain in several South American countries are conducive to growing coffee efficiently. While other countries can grow coffee‚ they are not as efficient and effective at coffee growing because of short seasons
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Part A Sole Proprietorship: A sole proprietorship is a business owned by one person. It is the most frequently used form of business and most small businesses begin as sole proprietorships. It is the easiest and cheapest type of business to start. • Liability: A sole proprietor is financially accountable for all of the unpaid debts of the business. The sole proprietor’s business assets and liabilities and his or her personal assets and liabilities are the same. If the business were to go out
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opportunity cost. The owners could have earned interest at the bank (say 16% per annum) on the amount invested in the firm. The owners must therefore receive compensation for this opportunity cost and the risk they are accepting. In the case of a sole proprietorship‚ one person accepts the risk. However‚ the owners and management of a business enterprise are not the same people. In some cases managers are appointment to act on behalf of the owners. It may also require the involvement of partners who are
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first is the sole proprietorship‚ which is a business owned and operated by one person. The second is the partnership‚ which is a business jointly owned by two or more persons. The third is the corporation‚ which is recognized as a separate entity having all the rights of an individual. The proprietorship is the most common and most profitable form of business organization. The corporation is the largest and most visible. The most common form of business organization in the US is the sole proprietorship
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determine the proper form of business to establish. The inventors’ situation is unique and narrows his choices of business types due to his lack of financing‚ business skills‚ and family. The three types of business he would have to research are sole proprietorship‚ partnerships‚ and corporations. Each type of business has advantages and disadvantages depending on the specific needs of the business owner(s). The inventor should consider the limited partnership business type as this would‚ provide resolution
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weighing in the advantages and disadvantages of the three types of business organizations which are sole proprietorship‚ partnership‚ and corporation. To start the process of forming a business there are three main forms of business organizations that a potential small business owner must choose from. Three of the main business organizations used in the market place today includes sole proprietorship‚ partnership‚ and corporation. Deciding on a business structure appropriate for a new business will
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LIT 1 Task 1 Sole Proprietorship A sole proprietorship is the most common type of business in the United States. It is formed when a person starts a business‚ but does not register it as a corporation‚ or a limited liability company. Most contractors‚ consultants‚ and home businesses operate under this form of business. Sole proprietorships are easy to form‚ and provide the owner with total control over the business. All of the profits belong to the owner‚ because the business and the owner
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The financial manager should examine available risk-return trade-offs and make his decision based upon the greatest expected return. False 2.Only a few financial decisions involve some sort of risk-return tradeoff. False 3.The sole proprietorship can be described as the absence of any legal business structure. True 4.In a general partnership‚ all partners have unlimited liability for the actions of any one partner when that partner is conducting business for the firm. True
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structure‚ a Sole Proprietorship. Since you currently are operating this way‚ it will be easiest‚ and make the most sense to explain it to you. As with the rest of the structures‚ we will go through a list of each of the seven characteristics of a business. Liability-First is a concern for you‚ liability‚ say for instance‚ in the situation of a contract employee. This could end up being a major concern for you. It is one of the larger disadvantages of a sole proprietorship
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2-01-06 Part A Sole Proprietorship - • LIABILITY – There is no separation between the individual and the business. As the owner and operator of a sole proprietorship‚ all of the profit and loss is the personal responsibility of the business owner creating unlimited liability. • INCOME TAXES – As a sole proprietor all business income or losses must be reported as personal income tax. The business itself is not taxed separately. • LONGEVITY/CONTINUITY – The sole proprietorship is defunct once
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