What are some of the Pros & Cons of getting the Persian Queens Correct Answer Pros:
• Pregnant Paws (PP) currently breeds Persians, so it is likely
... [Show More] that this would be a
smooth transition using current experience.
• There is a stable market for the kittens, and PP has an established reputation for
Persian cats.
• Persians are extremely healthy and PP's breeding program has a very low mortality
rate, making expected projections of litters likely.
Cons:
• The market is highly competitive for Persian cats, which could result in lower revenues than forecasted, impacting PP's return on investment.
What are some of the Pros & Cons of getting the Himalyan cats Correct Answer Pros:
• Himalayans are currently trendy and on the rise, with demand expected to increase,
which supports the sales assumption.
Cons:
• There is no indication whether the trend for this breed is here to stay, so a short time from now PP could face difficulties selling the kittens.
• Himalayans have been known for a poor temperament, making it more likely that the
trend will diminish.
• Himalayans have a higher likelihood of health issues, which creates risk that the projected returns based on current assumptions would not be realized.
Pros/Cons of Incorporating Correct Answer Under both options, reasonable wages could be paid to all family members working in
the business in order to achieve income splitting. For example, you could each take
reasonable salaries for helping care for the cats throughout the year.
Continuing the existing proprietorship would avoid any setup or additional ongoing legal
and accounting costs. A corporate structure is a costly alternative with respect to the
initial incorporation and ongoing compliance (for example, accounting fees for corporate
tax return preparation). However, it would also provide limited liability, reducing your
personal financial exposure to your investment in the business.
Proprietorship income or losses are reported directly on the owners' personal tax
returns and can offset other income. Since PP is expected to be profitable in the first
year of the expansion, there would be no losses to deduct against other personal
income (such as Tom's pension). Furthermore, all the income would be taxable at the [Show Less]