Ch. 04 Business quiz

A type of business entity that provides liability protection but is taxed like a partnership is a: C corporation general partnership franchise S corporation joint venture

* C corporation

The C Corporation is another term for: limited liability companies general partnerships the conventional form of corporation multiple proprietorships limited partnerships

* the conventional form of corporation

Why do most large companies have outside directors on their boards? to bring a fresh view to all of the corporation's activities to create globalization efforts to meet federal government requirements to provide technology leadership to provide independent benchmarks

* to bring a fresh view to all of the corporation's activities

_____ are organizations formed by individuals or businesses with similar interests to achieve greater economies of scale and economic power through collective ownership. Limited partnerships Franchises Cooperatives Joint ventures Vertical mergers

*Cooperatives

Fred Pittman has invested $10,000 in his son's motorcycle repair shop, but he takes no part in its management. Pittman is a(n): general partner non-working partner unlimited partner entrepreneur limited partner

*limited partner

With its ease of registration and pro-corporate policies, _____ is called the "state of incorporation." About half of the Fortune 500 companies are incorporated there. Georgia California New York Delaware Ohio

*Delaware

IBM purchased MRO Software Inc. for $740 million. MRO was a niche provider of software and services to help customers including nuclear power plants and oil companies. IBM, plans to fold MRO into its software unit. This is an example of a(n): voluntary union acquisition conglomerate merger joint venture

*acquisition

A corporation has: limited liability ease of transferring ownership continuity of life all of the above ability to attract financing

*all of the above

Franchisors in foreign countries must be aware of: language differences all of the above currency exchange local culture political risks

*all of the above

Which of the following demographic groups is having the greatest impact on the growth of the franchising industry? Generation X pre-teens baby boomers teenagers Generation Y

*baby boomers

Bob Nichol and Martha Bohner own and operate a small company that bakes and sells Thunder Muffins, gigantic muffins full of blueberries, blackberries, or raspberries. They sell the muffins at a local farm that is open to the public on weekends. Since they operate the business as a partnership, they should: hire a manager to operate the business hire an outside consultant seek government assistance borrow as much as possible agree to share the business's profits and losses

*agree to share the business's profits and losses

A firm's stockholders have the right to do all of the following EXCEPT: elect the board of directors attend annual meetings share in company profits, in the form of dividends sell or transfer their ownership get discounts on the company's product or service

*get discounts on the company's product or service

Paul Hyatt owns and operates DeepClean, a Florida-based company that cleans up mold and mildew in homes and businesses. As the sole proprietor of the business, he has unlimited liability, which means: he usually has to put in an unlimited number of hours he has unlimited access to funds he must have liability insurance he is free from government regulation he is fully liable for all business debts

*he is fully liable for all business debts

_____ are corporate takeovers financed by large amounts of borrowed money. Amortized mergers Liquidity corporations Financed mergers Leveraged buyouts Debt acquisitions

*leveraged buyouts

Thom Georges wants to open a store where he sells nothing but antique architectural features that he can salvage from old houses being torn down to make way for progress. He has an eye for the kind of doors, windows, mantels, and so forth that decorators want, but he does not have all the funding he needs to get started. He has invited his parents to invest $40,000 in the enterprise. He has told them that if they do invest, they would have liabilities in the firm equal to but no greater than their investment. Georges is trying to get them to form a _____ with him. limited partnership joint venture closely-held corporation cooperative general partnership

*limited partnership

The combination of two companies that join to form one company is called a: merger voluntary union conglomerate joint venture cartel

*merger

A corporation's earnings are taxed as corporate earnings and as dividends to the stockholders. This is known as: double taxation double indemnity tax duplication primary and secondary taxation double jeopardy

*no answer yet

Miniature Precision Corporation, a microprocessor manufacturer, recently acquired Cameron-Price, a plastics mold manufacturer. Miniature Precision financed the transaction with 90 percent borrowed money and used Cameron-Price's assets as collateral. This type of merger is commonly known as a(n): leveraged buyout institutional takeover greenmail financial merger hostile takeover

*leveraged buyout

Kayla Langton is considering the purchase of a Bonus Building Care franchise. Langton is likely to get assistance from the commercial cleaning franchisor in which of the following areas? employee training permission to use company logo in advertising all of these accounting procedures site selection

all of these

Croutakie seemed like a great idea. Chef Leo Nyami and Sara Rice decided to take advantage of the popularity of shitake mushrooms and create some shitake mushrooms products that could be sold to restaurant patrons and other gourmets through their new company. The mushrooms are expensive, and there were other unexpected financial problems, so Nyami and Rice asked Bill Ng to become a limited partner. This means that Ng: qualifies for a limited income tax rate is limited in the amount he can invest is limited in the number of hours he can work each month agrees not to participate in day-to-day management of the firm agrees to limit his expertise to a certain area, such as finance or marketing

*no answer yet

Ottens Flavors, Philadelphia, announced its combination with MK Flavors & Co., Mexico City. The Mexican operation will offer the U.S.-based company an increased market presence in Central and South America. The new company will be renamed MK Ottens Flavors. MK Ottens Flavor was created through a(n): merger conglomerate voluntary union joint venture cartel

*no answer yet

Suzanne Pogell wanted to learn to sail, but she could find no one to teach her because men were the ones who sailed, and women were their crew. She finally did convince someone to teach her to sail, and after mastering sailing, she started an all-woman sailing school called Womanship as a sole proprietorship. When she dies, the: business continues with the employees running it government takes over and sells the assets business dies with her

*no answer yet

Which of the following is an advantage of sole proprietor ownership? Ease with which qualified employees can be found Freedom from government regulation Ease with which capital can be raised

*no answer yet

The fact that a corporation has limited liability means: corporations can earn a limited amount some of the owners are limited in earnings owners' liabilities are limited to the amount invested the life of the corporation is limited the corporation's ability to expand is limited

*owner's liabilities are limited to the amount invested

Pete Yankin and Ken Lowery consider themselves to be experts on hunting in the mountains in North Carolina. As a result, the two men established a company that markets hunting expeditions. Yankin and Lowery share responsibilities for booking the trips, gathering supplies, and guiding groups of five to seven hunters into locations where they can hunt for deer and bear. Since the two will share any profit equally, this would be an example of a(n): sole proprietorship cooperative partnership double proprietorship S corporation

*partner ship

A disadvantage of franchising to the franchisee is: assistance in site location national name recognition restricted operating freedom standardized operating procedures ongoing management training program

*restricted operating freedom

Of all forms of business ownership, corporations account for the largest share of both: number of firms and employees income and employees sales and profits number of firms and sales bankruptcies and employees

*sales and profits

The form of business ownership that has the most difficulty in raising capital is the: general partnership sole proprietorship cooperative corporation limited partnership

*sole proprietorship

The form of business ownership that is easiest to dissolve is the: sole proprietorship limited partnership subsidiary public corporation cooperative

*sole proprietorship

Back in the late 19th century, the Carnegie Steel company controlled not only the mills where the steel was manufactured, but also the mines where the iron ore was extracted, the coal mines that supplied the coal, the ships that transported the iron ore and the railroads that transported the coal to the factory. Through several _____ mergers the steel company gained control of the various resources it needed to product steel. vertical acquired horizontal combination functional

*vertical