Interest Rate and Sole Proprietorship: Exploring Financial Concepts

Which of the following statements is correct?

Compared to corporations, is it easier to make decisions in a sole proprietorship?

Is it difficult to transfer ownership in a sole proprietorship?

The correct statement is "Neither I nor II."

It takes approximately 12.23 years for $14,050 to grow to $26,500 if the interest rate is set at 15%.

The first statement, "Compared to corporations, it is easier to make decisions in a sole proprietorship," is not entirely accurate. While sole proprietors have more autonomy and control over decision-making compared to corporations, it doesn't necessarily mean decision-making is easier. Sole proprietors bear the entire responsibility of decision-making, which can be challenging and overwhelming at times.

The second statement, "It is difficult to transfer ownership in a sole proprietorship," is also incorrect. Transferring ownership in a sole proprietorship is relatively easier compared to other business structures like partnerships or corporations. Sole proprietors have the freedom to sell or transfer their business assets without complex legal procedures.

To calculate the time it takes for an amount to grow to a certain value with a given interest rate, we can use the compound interest formula.

Future Value = Present Value * (1 + interest rate)^time

Therefore, it takes approximately 12.23 years for $14,050 to grow to $26,500 at a 15% interest rate.