16) Hester wants to run her own picture framing business, but she doesn't want to start it from scratch. She decides to buy an existing business. What is one advantage of doing this? A) It eliminates all the guesswork inherent in starting a new business. B) It allows her to know the problems the business already has. C) It provides a built-in network of customers, suppliers, and distributors. D) It gives her the freedom to develop exactly the business she wants. E) It eliminates all the costs Hester would normally have in starting a business.

16) Hester wants to run her own picture framing business, but she doesn't want to start it from scratch. She decides to buy an existing business. What is one advantage of doing this? A) It eliminates all the guesswork inherent in starting a new business. B) It allows her to know the problems the business already has. C) It provides a built-in network of customers, suppliers, and distributors. D) It gives her the freedom to develop exactly the business she wants. E) It eliminates all the costs Hester would normally have in starting a business.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Rahul is an intern at a retail store. Store accountant is trying to talk the owner and is trying to convince him to purchase an integrated enterprise system (IES) for small businesses. The owner thinks the accountant is just trying find a way to charge more service fee. On what basis would Rahul convince the owner that each piece of the integrated enterprise system would help the business?
Fatma has always loved to cook and is interested in starting a catering business. Being aware of the failure rate of new businesses, she is considering buying an existing catering business, Tasty Caterers that is up for sale. The Tasty Caterers claim that the business is highly profitable, but Fatma has her doubts. She wonders why the owners of Tasty Caterers would be so interested in selling the business if it is such a money-maker. Furthermore, the price that they are asking seems high to Fatma. Without any formal training in accounting, Fatma asks a friend, Rawan, for advice. Q) What suggestion do you think Rawan would have given Fatma, so that she can clarify her doubts regarding the financial standing of the company Tasty Caterers?
Fatma has always loved to cook and is interested in starting a catering business. Being aware of the failure rate of new businesses, she is considering buying an existing catering business, Tasty Caterers that is up for sale. The Tasty Caterers claim that the business is highly profitable, but Fatma has her doubts. She wonders why the owners of Tasty Caterers would be so interested in selling the business if it is such a money-maker. Furthermore, the price that they are asking seems high to Fatma. Without any formal training in accounting, Fatma asks a friend, Rawan, for advice. Q) If Fatma decides to purchase Tasty Caterers, what plans do you think she must have in place? Give specific examples of each of the three types of planning with regard to Fatma's business.
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Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice. 1. State three (3) of the main advantage they gain by selecting a corporate form of business now. 2. Would you recommend they initially issue preferred or common stock? Why? 3. If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer.
Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice. Requirements: State three (3) of the main advantage they gain by selecting a corporate form of business now. Would you recommend they initially issue preferred or common stock? Why? If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer. Assume one year later (2019) the…
benny’s father tim is an inventor and needs help bringing his latest invention to market, so he contacts mary who is a very successful businesswoman and who is always looking for a place to put her money to work for her. mary’s great uncle paul is an inventor also and likes to introduce disruptive ideas into the marketplace, but never asks mary for help.
Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice. Requirements: 1. State three (3) of the main advantage they gain by selecting a corporate form of business now. 2. Would you recommend they initially issue preferred or common stock? Why? 3. If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer. 4. Assume one year later (2019)…
Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice. Requirements: State three (3) of the main advantage they gain by selecting a corporate form of business now. Would you recommend they initially issue preferred or common stock? Why? If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer. Assume one year later (2019) the…
Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice. State three (3) of the main advantage they gain by selecting a corporate form of business now. Would you recommend they initially issue preferred or common stock? Why? If the corporation when formed sets a par value for its shares low and issue common stock for a price above par, what is this amount above par called? Can this amount be treated as a gain, income, or profit for the corporation? Please give the reason for your answer. 4. Assume one year later (2019) the company KY…
Karen and Yanique are opening a jewellery store with no competition in the area from which they intend to operate their business. Their fundamental decision is how to organize the business. They anticipate super profits the first year, with the ability to sell franchises in the future. Although they have enough to start the business now as a partnership, cash flow will be an issue as they grow and as such, they feel the corporate form of operation will be best for the long term. They seek your advice. 1. State three (3) of the main advantage they gain by selecting a corporate form of business now. 2. Would you recommend they initially issue preferred or common stock? Why?

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