Because risk is associated with the potential for higher profits, businesspersons are motivated to choose organizational forms that limit their liability while allowing them to take risks that may lead to greater profits. a) trueb) false

Question

Business

Skylar Griffith

22 March, 18:06

Because risk is associated with the potential for higher profits, businesspersons are motivated to choose organizational forms that limit their liability while allowing them to take risks that may lead to greater profits. a) trueb) false

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Answers (1)

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Sherlyn Page · Answer 1

The given statement is true.

Explanation:

When we come across the term "Business", there is a sure "risk" involved on it. Without risk no business can run. But we have to be prepared to face the risk. Certain risk should be taken and certain risks should be avoided which would cause sure or severe damage to the organization.

Liability:

"Financial debts associated with the business operation are termed as liability."

So the business persons should be guided to to limit their liability but still needs to exposed to risk to achieve higher profits.