Realize operating losses

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Reference no: EM13991840

Jacqui and Joanne plan to buy a bed-and-breakfast inn for $200,000. Jacqui will con- tribute $20,000 toward the purchase and operate the enterprise. Joanne's primary role is that of investor. She will contribute $100,000. However, she will be an active partici- pant because of her involvement in management decisions. They will borrow the balance of the purchase price from a local bank. Advise Jacqui and Joanne on a choice of business form. Consider that the enterprise is expected to realize operating losses of $50,000 annually for the first 3 years. During the 4th year, the inn should realize a meager profit.

Reference no: EM13991840

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