Contemporary Business Ch 5
What percentage of American businesses is considered small businesses?
99.7%
With set-aside programs for small businesses, up to _____ of certain government contracts are designated for small businesses.
23%
What percentage of small businesses survives the first five years of operations?
50%
Most manufacturing businesses are considered small if they employ fewer than _____ workers.
500
Which of the following is a benefit to the franchisor in a franchise agreement?
A franchisor can make better buying deals because of quantity purchases.
Which of the following is most likely to be a cooperative business operation?
A group of neighboring farm owners
Which of the following is least likely to be a small business?
A nursing home
How does a partnership differ from a sole proprietorship?
A partnership is more difficult to dissolve than a sole proprietorship.
Which type of business is most likely to operate as a cooperative business?
Agricultural
_____ is an organization that provides temporary low-cost, shared facilities to small start-up ventures.
Business incubator
Which of the following is NOT an advantage of a corporation?
Double taxation on corporate earnings
Why do home-based businesses often have lower costs?
Funds that are not being used for leasing or warehouse space can be directed into the business.
Which industry listed below is NOT dominated by small businesses?
Hospitals
What characterizes a small business?
It is independently owned and operated and is not dominant in its field.
Which of the following is true of a franchisor?
It usually stipulates the purchase of certain ingredients or equipment, pricing, and marketing efforts.
Which of the following is a major drawback of family-owned businesses?
Lack of legal structure
Which of the following risks does the franchisor take on in a franchise agreement?
Loss of control over every aspect of the business
Which of the following is not one of the customary services of the Small Business Administration?
Providing direct loans
Which of the following does not grant direct loans to small businesses?
Small Business Administration
Which is the most common form of business ownership?
Sole proprietorship
Which of the following briefly answers the who, what, where, when, why, and how questions for a small business?
The executive summary
Who owns the corporation?
The stockholders
Which of the following is an advantage of mergers?
They allow a company to diversify and increase customer base
What best describes the contribution of U.S. small businesses in world markets?
They generate nearly more than half the nation's gross domestic product
Which of the following is true of S Corporations?
They have fewer than 100 stockholders.
Which of the following is true of owners of common stock?
They have voting rights but only a residual claim on the firm's assets.
_____ out of every three new jobs are created by small business.
Two
A written document that provides a statement of a company's goals, methods for achieving goals, and standards for measurement is called:
a business plan.
A legal organization with assets and liabilities separate from those of its owner is called:
a corporation.
An organization whose owners join forces to run all or part of the activities in their firm or industry is referred to as a:
cooperative
A corporation that does business in states other than the state in which it filed incorporation papers is called a(n):
foreign corporation.
A(n) _____ combines firms in the same industry that wish to diversify, increase their customer base, cut costs, or offer expanded product lines.
horizontal merger
Small businesses often fail due to:
inadequate financing.
A(n) _____ consists of two or more firms combined to form one company.
merger
Small-business loans often used to buy equipment or operate a business are called:
microloans.
Amtrak is an example of:
public ownership of a for-profit corporation.
The primary purpose for developing a business plan is:
to obtain financing for the business.
A merger between two companies at different levels of the production and marketing of a product is called a(n) _____ merger.
vertical
Unlike large businesses, small businesses often hire:
younger, teenage workers