Sam Jones, Mary Adams, and Larry Brown have been talking about starting their own business for several years

A) Forming a partnership when starting a business has always been regarded as risky. For an instance, partners in a partnership generally have "unlimited liability". Unlimited liability means that the partner's liability will be extended to up to his personal assets. In line with this, it is important that we should carefully consider all other options. In the problem given, because they have been talking about the business for several years and must have carefully filled out a plan, the best thing to do is to form a general partnership with equal liabilities and equal distribution of profits. In this way, every partner will feel equally empowered. Another thing to consider is to put in the partnership contract the fixed term that the partnership will be formed.

B) Broadly speaking, external financing is almost always costlier than using own capital. If a company will use external financing, it may either come in the form of liability or equity. If the company will loan(liability), they have to pay an interest expense. If they will finance through equity, meaning they will give other people ownership in the business(usually in the form of stocks if corporations), they will have to pay dividends. If they can finance it on their own, they don't have to pay either of these.

The probability that Joe Latte can obtain a grant to start a combination coffee and Italian ice cream shop would depend on how carefully he planned his business. If he can show that he has a well-thought plan, and all contingencies were considered, the possibility of receiving the grant will be greater. In the problem above, a business plan has been completed and assuming it was a good plan and he will be able to show it confidently, then the probability of receiving the grant is reasonably high (but not absolute).