Reference no: EM133230140

Question 1.

Otis loves to bake cookies, and his friends suggest that he open a bake shop. After saving some money, Otis decides that he will start his own business. Otis is familiar with sole proprietorships, limited liability companies, and corporations, but he is unsure which option is best for his business.

Consider the scenario and answer the following question:

Should Otis select a sole proprietorship, limited liability company, or corporation?

Explain why the form of business organization you selected is best for Otis.

Question 2.

Otis hires Kelly to help in his new bake shop. Kelly enjoys the job, is always on time, and is happy with the hourly pay. One day, after Kelly mops the floor, Doug shows up to deliver a package. Doug slips on the wet floor and breaks his leg.

Consider the scenario and answer the following question:

Is Otis responsible for Doug's injury?

Explain the elements of an agency relationship in your response.

Question 3.

Otis is looking to expand his business. He has the opportunity to make sugar-free cookies using a new artificial sweetener. This sweetener is inexpensive and would increase Otis's profit margin. However, there are some health concerns about the artificial sweetener, as studies show that it may cause cancer. Otis would like to increase his profits, but he is concerned about the health risks of using the artificial sweetener.

Consider the scenario and answer the following question:

Should Otis use the artificial sweetener?

Discuss both the financial and ethical implications of Otis's decision.