Essentials of Corporate Finance
Essentials of Corporate Finance
8th Edition
ISBN: 9780078034756
Author: Stephen A. Ross, Randolph W. Westerfield, Bradford D. Jordan
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 1, Problem 1.2C
Summary Introduction

To critically think about: The three main questions that has to be addressed, if Person X wishes to start his own business.

Introduction:

A type of business or enterprise that is owned and run by a single person is known as a sole proprietorship. In a sole proprietorship, there are no legal variation between the legal entity and the owner.

Expert Solution & Answer
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Explanation of Solution

The three main questions that have to be addressed by Person X, if he wishes to start his own business:

  • Are the long-term investment of the business like the land, building, equipment, and machinery essential for a business?
  • From where can Person X get his long-term financing as it is helpful in making payments for the investments?
  • How can Person X manage his day to day financial activities like collecting the money from the customers and making payments to the suppliers?
Conclusion

The above are not the only questions but they are more significant. Business finance is a major study of the ways to answer the above three question.

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