Question

In: Operations Management

Granval is concerned about the risks involved in launching a new business, especially the financial risks....

Granval is concerned about the risks involved in launching a new business, especially the financial risks. If he chooses the sole proprietorship form of ownership, his liability is ________.

Group of answer choices

a) shared with his investors

b) limited to the amount of his taxes

c) shared with his creditors

d) unlimited

is an important part of researching a firm's feasibility.

Group of answer choices

a) Researching the legal business forms

b) Pinpointing potential competitive advantages

c) Identifying potential opportunities

d) Exploring finance options

Solutions

Expert Solution

(Q) Granval is concerned about the risks involved in launching a new business, especially the financial risks. If he chooses the sole proprietorship form of ownership, his liability is Unlimited.

Justification

Unlimited liability refers to the complete legal responsibility the owners or the stakeholders shall assume for all the liabilities and debts that may occur. Here, if the owner chooses the sole proprietorship the benefits as well as the liabilities will only be bound to him and himself only. And if the company fell into the liability (loss) and needs to be liquidated, in sole proprietorship it has to be taken care of by the owner itself, that is only one owner will be there in the legal context of Sole proprietorship.

(Q) Exploring finance options is an important part of researching a firm's feasibility.

Justification

Exploring finance options in the sense, meeting with lending partners, banks, bodies that provide the financial aids, etc, because researching the legal business forms will be taken care and done usually on the planning stages, likewise the rest of the two also; pinpointing potential competitive advantages and identifying potential opportunities. Since these two are quite relevant in market research as well as in the feasibility study, these are taking up as a parameter to gauge the scope of getting into a new market or to establish a newer face if it's an existing one.

But the important part is to find the financing options as while getting into the new market there would be a lot of barriers to cross to make convince the financial bodies to get the loans or even to get financial support from the Government authorities.

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keosha answered 8 months ago
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