Chp 6

Caveat Emptor

(let the buyer beware) Which has been made into philosophy sometimes used by businesses to put the burden for consumer protection onto the customer

Book Value

The difference between the original acquisition cost and the amount of accumulated

Buy in

The purchase of substantially less than 100% of a business

Buyouts

The purchase of substantially of an existing business

Discounted Cash Flow

Cash flow that has been reduced in value because they are to be received in the futur

Franchise

a prepackaged business bought rented, or leased from a company called a franchisor

Heuristic

A commonsense rule; a rule of thumb

Trade Name Franchise

An agreement that provides to the franchisee only on the rights the franchisor's trade name and/or trademarks

Transfer

An endgame strategy in which ownership is moved from one person or group to another

Termination

An endgame strategy in which the owners closes down a business

Due Diligence

Is the process of investigating to determine the full and complete implications of buying a business

Takeover

The seizing of control of a business by purchasing its stock to be able to select the board of directors

Synergy

A combination in which the whole is greater than the sum of its component parts

workout

A form of business termination in which the firms legal or financial obligations are not fully met at closing

start-up

A new business, starting from scratch

Broker

A person who buys and sells goods or assets for others

serial entrepreneur

A person who opens multiple businesses throughout his or her career

Intangibles

Assets, such as patents or trademarks, and liabilities such accounts payable that have no physical existence

walkaway

Business in termination in which the entrepreneneur ends with its obligations met