John and Ruby Couch just opened a computer store in a small community. Before opening the store, they listened to their SBA counselor's warnings about the importance of having balanced experience, that is, marketing, finance, and personnel experience in the computer-store business because
A) their business is unlikely to grow and earn large business profits.
B) the computer-store business is a fad.
C) management know-how is insignificant to small-business success.
D) small businesses survive large businesses by three years.
E) about two out of three small firms close within five years of their founding.
Question 2
Although Hargrove Co makes enough money to pay for everything it needs, it still chooses to have some debt and pay a larger portion of retained earnings back to the stockholders. What is likely the best explanation for this decision?
A) Reduced interest rate
B) Financial leverage
C) Return multiplier
D) Equity leverage
E) Debt multiplier
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