1. You plan to invest $10,000 in a general partnership. There will be four other general partners, each contributing $10,000. So, the total contributed by the general partners is $50,000 and each partner owns 20% of the partnership. The partnership plans to borrow $250,000 from the bank. Therefore, the partnership will have a total of $50,000+ $250,000 $300,000 in cash to start its business. What is your largest potential loss from your investment in the partnership? In other words, how much would you lose if the $300,000 is invested in an asset that immediately loses all of its value (i.e., the asset's value drops to $0)?

1. You plan to invest $10,000 in a general partnership. There will be four other general partners, each contributing $10,000. So, the total contributed by the general partners is $50,000 and each partner owns 20% of the partnership. The partnership plans to borrow $250,000 from the bank. Therefore, the partnership will have a total of $50,000+ $250,000 $300,000 in cash to start its business. What is your largest potential loss from your investment in the partnership? In other words, how much would you lose if the $300,000 is invested in an asset that immediately loses all of its value (i.e., the asset's value drops to $0)?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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