Instructions Answer the following question: Thompson and Allenby wish to enter the camping equipment manufacturing business. For each scenario, which type of business organization would be most advantageous? A. Thompson is an expert in the field of camping gear production and sales but has no funds. Allenby knows nothing about such production but is willing to contribute all necessary capital. B. Camping gear production requires much capital, much more than Thompson and Allenby can raise personally or together; however, they wish to control the business. C. Some production phases are rather dangerous, and a relatively large number of tort judgments may be anticipated. D. Sales will be nationwide. E. Thompson and Allenby are both sixty-five years old. No profits are expected for at least five years, and business interruption before that time would make it a total loss. F. Several other persons wish to put funds into the business but are unwilling to assume personal liability. G. At least for the first few years, the anticipated earnings over cost will be approximately $70,000. Thompson and Allenby wish to draw salaries of $25,000 each; they also want a hospitalization and retirement plan, all to be paid from these earnings. H. A loss is expected for the first three years, owing to the initial capital outlay and difficulty entering the market.
Instructions
Answer the following question:
Thompson and Allenby wish to enter the camping equipment manufacturing business. For each scenario, which type of business organization would be most advantageous?
A. Thompson is an expert in the field of camping gear production and sales but has no funds. Allenby knows nothing about such production but is willing to contribute all necessary capital.
B. Camping gear production requires much capital, much more than Thompson and Allenby can raise personally or together; however, they wish to control the business.
C. Some production phases are rather dangerous, and a relatively large number of tort judgments may be anticipated.
D. Sales will be nationwide.
E. Thompson and Allenby are both sixty-five years old. No profits are expected for at least five years, and business interruption before that time would make it a total loss.
F. Several other persons wish to put funds into the business but are unwilling to assume personal liability.
G. At least for the first few years, the anticipated earnings over cost will be approximately $70,000. Thompson and Allenby wish to draw salaries of $25,000 each; they also want a hospitalization and retirement plan, all to be paid from these earnings.
H. A loss is expected for the first three years, owing to the initial capital outlay and difficulty entering the market.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
