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There are many reasons why individuals want to run their own [#permalink]
15 Oct 2003, 01:40
50% (02:58) correct
50% (01:43) wrong based on 2 sessions
There are many reasons why individuals want to run their own businesses. Some foresee more personal satisfaction if they are successful in launching their own business, while others are interested mainly in the prospect of larger financial rewards. Since the late 1970s and early 1980s, tax regulations and other changes have encouraged increasing numbers of venture capitalists and entrepreneurs to start new enterprises. Since 1980, some one-half million new ventures have been started. Not all have succeeded, of course.
The above statement makes which of the following assumptions?
a) Success in starting a new business depends in large part on sound financial planning.
b) Social incentives motivate investors just as much as financial rewards.
c) Financial incentives are associated with new business starts.
d) Most new business ventures succeed initially but fail later on.
e) Venture capitalists are motivated by non-monetary gains.
Explanation: While personal satisfaction is a motivating factor, the statement shows that since 1980, business starts increased along with a set of tax changes, promoting financial gains. (B) is the second best answer. However, it cannot be inferred that social motives are just as strong as the financial motive, given that the passage states that tax regulations motivated increasing numbers of entrepreneurs to invest. Answer choice (A) may be correct, but there is nothing in the passage to substantiate it. Choice (D) may be eliminated because of the word "most." There is no evidence in the passage to support answer choice (E). (C) is the correct answer.