MGT 255 - Chapter 5
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What are some advantages to buying a business?
Reduction of risk
Reduction of time and set-up expenses
Reduction od competition
Capitalization of business strength
Possible assistance from the previous owner
What are some disadvantages of purchasing?
Decisions about price
Where can you find businesses for sale?
Real estate brokers
Word of mouth
Who can you determine a price/value of a business?
Asset value - book value/replacement value
Earnings value - capitalization of earnings method/times earning method
Combination Methods - analytical method/historical method
What would you like to do?
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