1. One disadvantage of debt financing is the lack of diversification of risk to other investors.

True

False

2. Debt leverage is described as increasing the rate of return on funds invested by borrowing funds.

True

False

3. One reason why prospective buyers of an existing business should meet the firm's key employees is to evaluate their reaction to the sale of the business.

True

False

4. One reason why prospective buyers of an existing business should meet the firm's key employees is to evaluate their reaction to the sale of the business.

True

False

5. According to our lesson, goodwill on the sale of an existing business, should not exceed 30%of the cost of assets --even for awell-established business such as,Tim Hortons.

True

False