Question 1

It is impossible to run a franchise completely from home.

Accepted Answer

A) True 
 B)False

Question 2

A leveraged buyout is an attempt by top management to gain control of a company by issuing a large amount of new stock.

Accepted Answer

A) True 
 B)False

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

One result of taking a firm private is:

Accepted Answer

A)  The firm's stock is no longer available for purchase on the open market. 
B)  Managers lose some control as the number of stockholders increases. 
C)  The public image of the firm will suffer. 
D)  The firm will have access to more capital. 
A)  The firm's stock is no longer available for purchase on the open market. 
B)  Managers lose some control as the number of stockholders increases. 
C)  The public image of the firm will suffer. 
D)  The firm will have access to more capital.

Question 5

Trevor and Tyler own all the stock in the Double T Corporation.The stock of this corporation is not sold to the general public.Trevor and Tyler own a:

Accepted Answer

A)  Limited liability company. 
B)  Master limited partnership. 
C)  Alien corporation. 
D)  Closed corporation. 
A)  Limited liability company. 
B)  Master limited partnership. 
C)  Alien corporation. 
D)  Closed corporation.

Question 6

A franchise agreement is an arrangement where a franchisor sells the rights to a business name and the right to sell a product or service within a given territory to a franchisee.

Accepted Answer

A) True 
 B)False

Question 7

A non-profit corporation does not seek personal profit for its owners.

Accepted Answer

A) True 
 B)False

Question 8

A limited partner is an owner who assumes no management responsibility and has no liability for losses beyond the amount invested.

Accepted Answer

A) True 
 B)False

Question 9

When an owner of a franchise wants to pass ownership on to their heirs:

Accepted Answer

A)  they don't have to take any action or contact the franchisor. 
B)  they only must contact the franchisor. 
C)  they must pay a fee to the franchisor. 
D)  they must tell the franchisor of their plan and arrange for training for those wanting to take an ownership position. 
A)  they don't have to take any action or contact the franchisor. 
B)  they only must contact the franchisor. 
C)  they must pay a fee to the franchisor. 
D)  they must tell the franchisor of their plan and arrange for training for those wanting to take an ownership position.

Question 10

One of the drawbacks of a limited liability company is that most states do not yet recognize this form of ownership.

Accepted Answer

A) True 
 B)False

Question 11

If a sole proprietorship fails,the owner may lose whatever was invested in the business,however,the owner's personal assets are not at risk.

Accepted Answer

A) True 
 B)False

Question 12

Last night as you scrolled through the TV channels to find an action flick,you came across an old movie with tough guy,James Cagney,called "Yankee Doodle Dandy".Although not particularly your kind of movie,you stayed on that channel for a few minutes because Cagney and another guy were in partnership together.They were arguing over who was the senior partner and who was the junior partner,even though,clearly,they started the business at the same time.If you were brought on board as their present-day business advisor,you would explain to them that all partnerships have at least one general partner (known as the senior partner)and one limited partner (known as the junior partner).

Accepted Answer

A) True 
 B)False

Question 13

The sole proprietorship form of ownership tends to be attractive to people who want to invest in a company without taking an active role in management.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following statements about the operation of a corporation is correct?

Accepted Answer

A)  A corporation receives its charter from a state government. 
B)  A corporate charter automatically expires in 99 years and must be renewed if the corporation wants to remain in business. 
C)  Owners of a corporation have unlimited liability for any claims against their company. 
D)  A corporation tends to be much easier to set up than a sole proprietorship or partnership. 
A)  A corporation receives its charter from a state government. 
B)  A corporate charter automatically expires in 99 years and must be renewed if the corporation wants to remain in business. 
C)  Owners of a corporation have unlimited liability for any claims against their company. 
D)  A corporation tends to be much easier to set up than a sole proprietorship or partnership.

Question 15

Franchising in global markets has demonstrated that high operating costs are counterbalanced by high profit opportunities.

Accepted Answer

A) True 
 B)False

Question 16

Marilyn paid a sizeable franchise fee to obtain a Fontmaster Printers franchise in Cleveland,Ohio.With the franchise fee behind her,she can look forward to using her creative talents to make her print shop different and more attractive than other Fontmaster shops in the Cleveland area.

Accepted Answer

A) True 
 B)False

Question 17

An advantage of corporations is their ability to attract good talent by offering stock options and other employee benefits.

Accepted Answer

A) True 
 B)False

Question 18

A ____________ is the share of profits or percentage of sales a franchisee pays to a franchisor.

Accepted Answer

A)  royalty 
B)  dividend 
C)  premium 
D)  co-pay 
A)  royalty 
B)  dividend 
C)  premium 
D)  co-pay

Question 19

In order to protect all parties and minimize misunderstandings among partners,all terms of the partnership should be spelled out in writing.

Accepted Answer

A) True 
 B)False

Question 20

Kristen and her brothers and sisters decided to form a partnership that specializes in home design of all types.One their goals is to maintain the loving relationship they currently enjoy so they are following the Model Business Corporation Act recommendations as they write the partnership agreement.Which of the following is an accurate recommendation of the Act?

Accepted Answer

A)  The business should be actively operating for an extended period before the partners decide who is responsible for what business functions. 
B)  Family businesses never take on outside partners,so no discussion of this need take place. 
C)  There should be discussion and well-understood ways that the partners will handle disagreements. 
D)  Due to the fact that they are all under 40 years old and expect to work until they are 65 there is no need to decide what will happen to the partnership if one decides to leave the business,retire,or die. 
A)  The business should be actively operating for an extended period before the partners decide who is responsible for what business functions. 
B)  Family businesses never take on outside partners,so no discussion of this need take place. 
C)  There should be discussion and well-understood ways that the partners will handle disagreements. 
D)  Due to the fact that they are all under 40 years old and expect to work until they are 65 there is no need to decide what will happen to the partnership if one decides to leave the business,retire,or die.

It is impossible to run a franchise completely from home.

A leveraged buyout is an attempt by top management to gain control of a company by issuing a large amount of new stock.

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

One result of taking a firm private is:

Trevor and Tyler own all the stock in the Double T Corporation.The stock of this corporation is not sold to the general public.Trevor and Tyler own a:

A franchise agreement is an arrangement where a franchisor sells the rights to a business name and the right to sell a product or service within a given territory to a franchisee.

A non-profit corporation does not seek personal profit for its owners.

A limited partner is an owner who assumes no management responsibility and has no liability for losses beyond the amount invested.

When an owner of a franchise wants to pass ownership on to their heirs:

One of the drawbacks of a limited liability company is that most states do not yet recognize this form of ownership.

If a sole proprietorship fails,the owner may lose whatever was invested in the business,however,the owner's personal assets are not at risk.

The sole proprietorship form of ownership tends to be attractive to people who want to invest in a company without taking an active role in management.

Which of the following statements about the operation of a corporation is correct?

Franchising in global markets has demonstrated that high operating costs are counterbalanced by high profit opportunities.

Marilyn paid a sizeable franchise fee to obtain a Fontmaster Printers franchise in Cleveland,Ohio.With the franchise fee behind her,she can look forward to using her creative talents to make her print shop different and more attractive than other Fontmaster shops in the Cleveland area.

An advantage of corporations is their ability to attract good talent by offering stock options and other employee benefits.

A ____________ is the share of profits or percentage of sales a franchisee pays to a franchisor.

In order to protect all parties and minimize misunderstandings among partners,all terms of the partnership should be spelled out in writing.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding How Economics Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

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

Appendix A: Using Technology to Manage Information

Appendix B: Managing Risk

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Exam 5: How to Form a Business

It is impossible to run a franchise completely from home.

A leveraged buyout is an attempt by top management to gain control of a company by issuing a large amount of new stock.

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

One result of taking a firm private is:

Trevor and Tyler own all the stock in the Double T Corporation.The stock of this corporation is not sold to the general public.Trevor and Tyler own a:

A franchise agreement is an arrangement where a franchisor sells the rights to a business name and the right to sell a product or service within a given territory to a franchisee.

A non-profit corporation does not seek personal profit for its owners.

A limited partner is an owner who assumes no management responsibility and has no liability for losses beyond the amount invested.

When an owner of a franchise wants to pass ownership on to their heirs:

One of the drawbacks of a limited liability company is that most states do not yet recognize this form of ownership.

If a sole proprietorship fails,the owner may lose whatever was invested in the business,however,the owner's personal assets are not at risk.

The sole proprietorship form of ownership tends to be attractive to people who want to invest in a company without taking an active role in management.

Which of the following statements about the operation of a corporation is correct?

Franchising in global markets has demonstrated that high operating costs are counterbalanced by high profit opportunities.

Marilyn paid a sizeable franchise fee to obtain a Fontmaster Printers franchise in Cleveland,Ohio.With the franchise fee behind her,she can look forward to using her creative talents to make her print shop different and more attractive than other Fontmaster shops in the Cleveland area.

An advantage of corporations is their ability to attract good talent by offering stock options and other employee benefits.

A ____________ is the share of profits or percentage of sales a franchisee pays to a franchisor.

In order to protect all parties and minimize misunderstandings among partners,all terms of the partnership should be spelled out in writing.

Taking Risks and Making Profits Within the Dynamic Business Environment

Understanding How Economics Affects Business

Doing Business in Global Markets

Demanding Ethical and Socially Responsible Behavior

Entrepreneurship and Starting a Small Business

Management and Leadership

Adapting Organizations to Todays Markets

Production and Operations Management

Motivating Employees

Human Resource Management: Finding and Keeping the Best Employees

Dealing With Employee-Management Issues and Relationships

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

Appendix A: Using Technology to Manage Information

Appendix B: Managing Risk

Filters