Ben and Chris combined their love of hockey with a business venture. They purchased a small portable cart and began selling hockey memorabilia outside of the hometown hockey arena. Their first year went well, but this past year has been a real struggle. Due to poor economic conditions including a loss of jobs, ticket sales at the arena are down, which has significantly hurt their sales as well. As a recent business school graduate, you explain to Ben and Chris:

Question 3 options:

this type of business is always high risk because it is seasonal.

the business does not fill a sufficient need for most people.

environmental circumstances are dynamic and tough to control.

social entrepreneurs are currently getting most of the attention.

environmental circumstances are dynamic and tough to control.

Explanation:

The performance of a business is not entirely dependent on the expertise of its managers,  or the owners. The macroeconomic conditions in the country influence business returns for all enterprises in a country. These macroeconomic conditions include unemployment rate, inflation, interest rates, and taxation.

Favorable economic conditions increase the probability of a business to make profits. Poor economics poses a challenge to businesses. Unfortunately, the macroeconomic factors are beyond the control of an individual or a group of companies. The economy undergoes thorough naturally occurring business cycles, which presents seasons of boom and downturns. Ben and Chris must be experiencing the downturn season, which is beyond their control.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711. 

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