Harry has just started a business with $500,000 of assets, funded by $300,000 of personal funds and $200,000 debt. Unfortunately, on the opening day, before Harry could take out an insurance policy and before he could make any sales, a customer, Julie, injures herself on business premises and successfully sues for medical bills of $800,000. All business assets can be sold at cost to cover part of the medical expenses. Assume Harry has $400,000 of personal assets, including his $300,000 investment in the business. Which of the following statements is NOT correct?

a.

If the business is set up as a sole trader, Julie will receive $500,000.

b.

If Harry has set the business up as a partnership with Sandra, both partners will be personally liable for the costs of winding up the business and the law suit.

c.

If Harry set this business up as a private company as the sole shareholder, his return on equity will be -100%.

d.

If Harry is a sole trader, his return on equity will be -133%.

e.

If the business is set up as a company, the customer, Julie, will receive $300,000 towards her medical bill.