What is the risk return relationship in investing?
The risk return relationship in investing is that the more risk you take on, the greater the potential return over the long term.
When does operating leverage exist?
Operating Leverage exists when small percentage changes in revenue produce large percentage changes in profits.
What are the advantages of forming an LLC?
There are many advantages of forming an LLC. The first is the limited liability portion. It protects the owners personal assets from lawsuits against the company whereas a sole proprietorship does not. It also gives the ability to be taxed as a pass through entity, like a partnership. This means that the company is not taxed at a company level, but rather the individual is on their proportionate share of income in their individual tax return.