Question 1

In a leveraged buyout, the managers of a firm, its employees, or other investors:

Accepted Answer

A) Move the company elsewhere and start over. 
B)  Obtain the assets of the company through bankruptcy proceedings. 
C) Borrow funds to buy out the firm's stockholders. 
D) Negotiate a merger with another firm to create a conglomerate. 
A) Move the company elsewhere and start over. 
B)  Obtain the assets of the company through bankruptcy proceedings. 
C) Borrow funds to buy out the firm's stockholders. 
D) Negotiate a merger with another firm to create a conglomerate.

Question 2

Which of the following statements about farm cooperatives is most accurate? Farm cooperatives have:

Accepted Answer

A) Declined in importance in recent years. 
B) Become a major force in American agriculture. 
C)  Run afoul of U.S. antitrust laws in recent years. 
D) Increased in number, but decreased in size in recent years. 
A) Declined in importance in recent years. 
B) Become a major force in American agriculture. 
C)  Run afoul of U.S. antitrust laws in recent years. 
D) Increased in number, but decreased in size in recent years.

Question 3

The is usually the easiest form of business to start and end.

Accepted Answer

A) sole proprietorship 
B)  limited partnership 
C)  corporation 
D) cooperative 
A) sole proprietorship 
B)  limited partnership 
C)  corporation 
D) cooperative

Question 4

A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish.

Accepted Answer

A) True 
 B)False

Question 5

A general partner takes an active role in the management of the business.

Accepted Answer

A) True 
 B)False

Question 6

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following people would be most interested in participating in a business organized as a cooperative?

Accepted Answer

A) Joe is intrigued by the idea of combining his time and resources with many other people to operate a business providing a good or service that they all will use. 
B)  Joan wants to be an owner of a business and share in its profits, but has no desire to take an active role in managing the company or participating in its daily operations. 
C)  Jeff wants to work for a government-owned business because he believes government ownership ensures a more equitable distribution of income and wealth. 
D) Jennifer prefers to work for a charitable organization that emphasizes helping people who are less fortunate than she is. 
A) Joe is intrigued by the idea of combining his time and resources with many other people to operate a business providing a good or service that they all will use. 
B)  Joan wants to be an owner of a business and share in its profits, but has no desire to take an active role in managing the company or participating in its daily operations. 
C)  Jeff wants to work for a government-owned business because he believes government ownership ensures a more equitable distribution of income and wealth. 
D) Jennifer prefers to work for a charitable organization that emphasizes helping people who are less fortunate than she is.

Question 8

Jane has always disliked the notion that the customers, managers and workers of a business are separate individuals with competing goals. She has joined with many other people in her community who share this view to become a member, and part owner, of a child care center. Jane and the other members operate the center for their own benefit, and each is expected to work at the center at least 12 hours each month. The type of organization Jane belongs to is known as a joint venture.

Accepted Answer

A) True 
 B)False

Question 9

By law, providers of personal services such as doctors and lawyers cannot set-up their businesses as limited liability companies.

Accepted Answer

A) True 
 B)False

Question 10

The reason a professional such as a lawyer or doctor would incorporate his/her business is

Accepted Answer

A) To be assured that another professional firm would not take over and make decisions - similar to a hostile takeover. 
B)  To comply with the law because insurance companies require that they be corporations. 
C) To protect his/her other assets with limited liability. 
D) To protect his/her assets with unlimited liability. 
A) To be assured that another professional firm would not take over and make decisions - similar to a hostile takeover. 
B)  To comply with the law because insurance companies require that they be corporations. 
C) To protect his/her other assets with limited liability. 
D) To protect his/her assets with unlimited liability.

Question 11

One advantage of a partnership is that there is a simple process for partners to terminate their business.

Accepted Answer

A) True 
 B)False

Question 12

In a typical franchise agreement, the franchisor pays the franchisee a fee to manage its company, and the two of them split the profits based on the percentages established in the agreement.

Accepted Answer

A) True 
 B)False

Question 13

One reason that a firm may choose to merge or acquire another company would be diversity with diversify of products or services.

Accepted Answer

A) True 
 B)False

Question 14

Two competitors: Stanley's Food Mart and Bluejay Groceries recently issued a joint announcement stating their decision to merge. The announcement claimed that the new firm would have more financial resources, which would enable it to expand services and broaden offerings to consumers. This proposed merger is an example of a horizontal merger.

Accepted Answer

A) True 
 B)False

Question 15

The three major types of mergers are acquisitional, joint, and connective.

Accepted Answer

A) True 
 B)False

Question 16

Most states have legal restrictions that prevent individuals from incorporating.

Accepted Answer

A) True 
 B)False

Question 17

A limited partnership consists of one or more general partners and one or more limited partners.

Accepted Answer

A) True 
 B)False

Question 18

Connie is a general partner in a retail cookie store. Her personal assets are legally protected from the debts of the business.

Accepted Answer

A) True 
 B)False

Question 19

When a group of investors take a firm private, they purchase all the company's outstanding stock.

Accepted Answer

A) True 
 B)False

Question 20

The "coattail effect" refers to inevitable repercussions on your business if a fellow franchisee should fail.

Accepted Answer

A) True 
 B)False

In a leveraged buyout, the managers of a firm, its employees, or other investors:

Which of the following statements about farm cooperatives is most accurate? Farm cooperatives have:

The is usually the easiest form of business to start and end.

A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish.

A general partner takes an active role in the management of the business.

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

Which of the following people would be most interested in participating in a business organized as a cooperative?

By law, providers of personal services such as doctors and lawyers cannot set-up their businesses as limited liability companies.

The reason a professional such as a lawyer or doctor would incorporate his/her business is

One advantage of a partnership is that there is a simple process for partners to terminate their business.

In a typical franchise agreement, the franchisor pays the franchisee a fee to manage its company, and the two of them split the profits based on the percentages established in the agreement.

One reason that a firm may choose to merge or acquire another company would be diversity with diversify of products or services.

The three major types of mergers are acquisitional, joint, and connective.

Most states have legal restrictions that prevent individuals from incorporating.

A limited partnership consists of one or more general partners and one or more limited partners.

Connie is a general partner in a retail cookie store. Her personal assets are legally protected from the debts of the business.

When a group of investors take a firm private, they purchase all the company's outstanding stock.

The "coattail effect" refers to inevitable repercussions on your business if a fellow franchisee should fail.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Union and Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Filters

Exam 5: How to Form a Business

In a leveraged buyout, the managers of a firm, its employees, or other investors:

Which of the following statements about farm cooperatives is most accurate? Farm cooperatives have:

The is usually the easiest form of business to start and end.

A comparison of the three major forms of business ownership shows that sole proprietorships are usually the most difficult type of business to establish.

A general partner takes an active role in the management of the business.

Many franchisors have rules that prohibit franchisees from sponsoring their own websites.

Which of the following people would be most interested in participating in a business organized as a cooperative?

By law, providers of personal services such as doctors and lawyers cannot set-up their businesses as limited liability companies.

The reason a professional such as a lawyer or doctor would incorporate his/her business is

One advantage of a partnership is that there is a simple process for partners to terminate their business.

In a typical franchise agreement, the franchisor pays the franchisee a fee to manage its company, and the two of them split the profits based on the percentages established in the agreement.

One reason that a firm may choose to merge or acquire another company would be diversity with diversify of products or services.

The three major types of mergers are acquisitional, joint, and connective.

Most states have legal restrictions that prevent individuals from incorporating.

A limited partnership consists of one or more general partners and one or more limited partners.

Connie is a general partner in a retail cookie store. Her personal assets are legally protected from the debts of the business.

When a group of investors take a firm private, they purchase all the company's outstanding stock.

The "coattail effect" refers to inevitable repercussions on your business if a fellow franchisee should fail.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding Economics and How It Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

Entrepreneurship and Starting a Small Business

Management and Leadership

Structuring Organizations for Todays Challenges

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Union and Employeemanagement Issues

Marketing: Helping Buyers Buy

Developing and Pricing Goods and Services

Distributing Products

Using Effective Promotions

Understanding Accounting and Financial Information

Financial Management

Using Securities Markets for Financing and Investing Opportunities

Money, Financial Institutions, and the Federal Reserve

Filters