Which of the following statements is correct?

a. If you are planning to start a business, which you will run as the sole employee, and if you expect the business to earn $1,000,000 per year before taxes, you always can minimize the total taxes you pay by setting up the business as a corporation.

b. Other things held constant, it is generally safer to invest money in a proprietorship than in a corporation.

c. There really is no difference between a general partnership and a corporation, because both have multiple owners and both offer limited liability to the owners.

d. According to the text, "agency problems" tend to increase when managers own larger relative amounts of the company's stock.

e. Most managers who focus solely on earnings do not consider the Impact that maximizing earnings in the current period has on future earnings (timing) or the firm's risk position.

Answer rating: 100% (QA)

correct answer is e Most managers who focus solely on earnings do not consider the Impact that maxim... View the full answer