BUAD 1010 quiz 3
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
