BUAD 1010 quiz 3

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Which of the following is an advantage of a partnership over a sole​ proprietorship?

Growth is possible through the addition of new talent and money.

Harlan Sanders was 65 when a new interstate highway bypassed his restaurant in​ Corbin, Kentucky, driving it out of business. Sanders hit the road with a couple of pressure cookers and his​ now-famous blend of herbs and​ spices, and spent almost a decade selling his process to restaurants by offering to cook their chicken for them. Colonel Sanders eventual success was MOST LIKELY due to which basic factor of​ success?

Hard work, drive, and dedication

Ellen Fuge is a famous guitar player. Samantha Ashe is a small business owner that wants to market guitars using​ Ellen's name as a brand. Ellen wants to invest heavily in the business but not be involved in management and she​ doesn't want to be liable for business debts above and beyond her investment. They want to keep things simple and private. What business structure should they consider under these​ circumstances?

Limited Partnership

Which of the following is true of master limited​ partnerships?

Master limited partnerships sell partnership interests to investors on public markets like the New York Stock Exchange.

Tyler, Dusty, and Matt own all shares of stock in Abels​ Enterprises, and shares of stock are not offered to the general public. Abels Enterprises is likely a​ _______.

closely held corporation

A(n) _______is an organization comprised of sole proprietorships​ and/or partnerships who work together for common​ benefits, such as enhanced financial​ power, greater production​ power, and/or superior marketing power.

cooperative

Numerous farmers in the Midwest pool their resources to buy​ seed, sell​ grain, store​ grain, and even help with marketing efforts. This is an example of which type of business​ entity?

cooperative

A​ _______has state-chartered legal status as a separate​ entity, along with property rights and obligations and an indefinite life span.

corporation

A Subchapter S corporation​ (S corporation) is a hybrid between a​ _______ and a​ _______, in that owners enjoy the benefits of limited liability but profits are not subject to double taxation.

corporation; partnership

One disadvantage of​ ________ is double taxation.

corporations

In order to allow the company to focus on more lucrative​ products, Johnson​ & Johnson sold its Ortho Clinical Diagnostics Division. This is an example of​ a(n) _______.

divestiture

Which of the following is an advantage of a sole​ proprietorship?

ease of formation

Deanna wants to open a sandwich shop near campus. Rather than start the business from​ scratch, she considers purchasing a franchise from Subway. If she decides to purchase the​ franchise, Deanna would be the​ _______, and Subway would be the​ _______.

franchisee; franchiser

In a​ partnership, a(n)​ _______ partner actively manages the business and has unlimited liability for the debts of the business.

general

Amanda owns a small floral shop and operates the business as a sole proprietorship. If Amanda passes​ away, her business​ _______.

legally dissolves

One of the biggest advantages of corporations is that investors cannot be held personally responsible for the debts of the business. This is the concept of​ _______.

limited liability

Which of the following is an advantage of corporations over sole proprietorships or general​ partnerships?

limited liability of owners

Which type of partnership acts much like a corporation in that it sells shares​ (partnership interests) to investors on public​ markets?

master limited partnership

Which of the following terms refers to two companies combining to form a new​ company?

merger

For an​ entrepreneur, which would be the MOST USEFUL personality​ trait?

open-mindedness

Shares of stock in a​ _______ corporation are available for sale to the public and are widely held.

publicly held

Which type of business might be best for a person with expertise but little or no capital​ investment?

services

Misty wants to earn extra money and decides to open a cleaning service for dormitory rooms at her college campus. She posts fliers on the bulletin boards in each dormitory and buys some cleaning supplies. She plans to operate this business alone and keep all of the profits. Based on this​ information, it would appear that​ Misty's business is a​ _______.

sole proprietorship

A(n) _______ is the collaborative effort of two or more independent organizations on a project for mutual gain.

strategic alliance

Pete has started an electronics firm with the potential for high growth. He obtains funding for the business from a group of investors who demand partial ownership of the business and representation on the board of directors. What type of financing has Pete​ procured?

venture capital

In​ 2012, Israeli inventor Izhar Gafni completed his first prototype of a bicycle made completely from recycled​ materials, mainly cardboard. His plan was to sell the bikes for​ $20 and to gain corporate sponsors that would allow his company to provide bikes at no cost to those who could not afford​ them, but as of 2017 his company had yet to put the bikes into production. What are the two MOST LIKELY attributes that make Izhar Gafni an​ entrepreneur?

Not afraid to take a risk and passion

In a​ corporation, who elects the board of​ directors?

Stockholders

Which of the following represents one of the existing trends for small business​ start-ups?

Emergence of e-commerce

One of the primary advantages of purchasing a franchise rather than starting a business from scratch is that a franchise offers​ _______.

a ready-made business model

Raul recently started a real estate company with a unique way of presenting a menu of​ services, each with a fixed​ price, rather than using the traditional commission on sales price. His firm has grown to 21​ brokers, and he has plans to expand his model nationally. In applying for a​ loan, how should Raul BEST present his​ firm?

as a small business


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