Question
Which of the following statements is incorrect? -All the answers are correct except one. A major disadvantage of debt financing is that debt payments are
Which of the following statements is incorrect?
-All the answers are correct except one. A major disadvantage of debt financing is that debt payments are not tax deductible for many corporations.
-Regardless of the type of asset, the firm tries to select assets that will generate the greatest cash flows for the firm's owners.
-One of the disadvantages of the sole proprietorship is related to the fact that the amount of equity capital that can be raised to finance the business is limited to the owner's personal wealth.
-Debt financing creates a contractual obligation and it must be paid regardless of the firm's operating cash flow, even if the firm suffers a financial loss.
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