Angelica wants to open a restaurant and is thinking of setting it up as a corporation. What are the advantages and disadvantages she will face by setting up the business as a corporation as opposed to a sole proprietorship or a partnership?
What will be an ideal response?
As a corporation, Angelica has the advantages of limited personal liability and a greater ability to raise funds. The disadvantages include the cost to organize the business as well as the possible double taxation of income at both the corporate level and at the income level for shareholders who earn dividends.
You might also like to view...
According to the Rule of 70, it takes 70 years for a sum of money to double in value when the interest rate is 5 percent
a. True b. False Indicate whether the statement is true or false
The demand for U.S. dollars in the foreign exchange market is determined by all of the following except
A. American demand for American products. B. Europeans who would rather hold U.S. dollars than euros. C. Foreign demand for American investments. D. Foreign demand for American exports.
Aggregate demand is the total value of GDP that
A. all sectors of the economy are willing to purchase at various price levels, all other things unchanged B. all sectors of the economy are willing to sell at various average price levels, all other things unchanged C. consumers are willing to purchase at various average price levels, all other things unchanged D. consumers are willing to purchase at various national income levels, all other things unchanged.
Suppose output is $35 billion, government purchases are $10 billion, desired consumption is $15 billion, and desired investment is $6 billion. Desired savings is equal to
A. $2 billion. B. $10 billion. C. $16 billion. D. $14 billion.