Question 1

What is the term for the party in a franchise relationship that pays for the right to use resources supplied by another business entity?

Accepted Answer

A) a franchisor 
B) a general corporation 
C) a limited partner 
D) a franchisee 
A) a franchisor 
B) a general corporation 
C) a limited partner 
D) a franchisee D

Question 2

What is an advantage of a corporation?

Accepted Answer

A) It has limited liability. 
B) It lacks permanence. 
C) It is not able to raise large amounts of financial capital. 
D) It requires less paperwork and government regulation. 
A) It has limited liability. 
B) It lacks permanence. 
C) It is not able to raise large amounts of financial capital. 
D) It requires less paperwork and government regulation. A

Question 3

What is a partnership? Describe the basic features of the three major types of partnerships: general partnerships,limited partnerships,and limited liability partnerships.

Accepted Answer

A partnership is a voluntary arrangement under which two or more people act as co-owners of a business for profit.There are three major types of partnerships.
In a general partnership,each partner takes an active role in management,shares in the profits,and has unlimited liability for the firm's debts.
A limited partnership consists of at least one general partner,who participates actively in managing the company and assumes unlimited liability,and at least one limited partner,who gives up the right to participate in management in exchange for limited liability.Both types of partners contribute financially to the company and share in its profits.

Question 4

Examples of institutional investors are mutual funds,insurance companies,and pension funds.

Accepted Answer

A) True 
 B)False

Question 5

Mergers and acquisitions basically mean the same thing; the only difference is the size of the companies involved.

Accepted Answer

A) True 
 B)False

Question 6

Firms that want to improve the integration of production activities or increase their control over the supply of inputs would be likely to consider what type of merger?

Accepted Answer

A) a conglomerate merger 
B) a vertical merger 
C) a generic merger 
D) a horizontal merger 
A) a conglomerate merger 
B) a vertical merger 
C) a generic merger 
D) a horizontal merger

Question 7

What type of liability do sole proprietors have for the debts of their companies?

Accepted Answer

A) shared liability 
B) unlimited liability 
C) limited liability 
D) no liability 
A) shared liability 
B) unlimited liability 
C) limited liability 
D) no liability

Question 8

Shareholders are required to purchase common stock before they can purchase preferred stock.

Accepted Answer

A) True 
 B)False

Question 9

One advantage of a general corporation is that it is easy and inexpensive to form.

Accepted Answer

A) True 
 B)False

Question 10

Unlike other types of corporations,not-for-profit corporations cannot have shareholders and cannot pay dividends.

Accepted Answer

A) True 
 B)False

Question 11

Suzanne Limley was just elected to the board of directors at United Bank Corporation.As a board member,who is she expected to represent the interests of?

Accepted Answer

A) shareholders 
B) creditors 
C) senior bank management 
D) customers 
A) shareholders 
B) creditors 
C) senior bank management 
D) customers

Question 12

A corporation is a form of business ownership in which the business is considered a legal entity separate and distinct from its owners.

Accepted Answer

A) True 
 B)False

Question 13

One reason given to justify a conglomerate merger is the desire to diversify into new markets,thus reducing the risk associated with adverse conditions in any single market.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following is a disadvantage of a sole proprietorship?

Accepted Answer

A) It is hard to attract and retain talented employees. 
B) It is expensive and difficult to set up this type of business. 
C) It is heavily regulated by most provincial and local governments. 
D) There is limited liability. 
A) It is hard to attract and retain talented employees. 
B) It is expensive and difficult to set up this type of business. 
C) It is heavily regulated by most provincial and local governments. 
D) There is limited liability.

Question 15

What is a disadvantage of corporations as a form of ownership?

Accepted Answer

A) Their growth is limited because of difficulties in raising financial capital. 
B) It is easy to start up and shut down. 
C) They are subject to single taxation. 
D) They are more expensive and complex to form than most other types of business. 
A) Their growth is limited because of difficulties in raising financial capital. 
B) It is easy to start up and shut down. 
C) They are subject to single taxation. 
D) They are more expensive and complex to form than most other types of business.

Question 16

One of the biggest trends in franchising over the past several years has been a rapid expansion into foreign markets.

Accepted Answer

A) True 
 B)False

Question 17

A business format franchise is a broad franchise agreement in which the franchisee pays for the right to use the name,trademark,and business and production methods of the franchisor.

Accepted Answer

A) True 
 B)False

Question 18

Explain why general corporations have become the dominant form of business ownership.

Accepted Answer

General corporations are businesses that

Question 19

Joe owns 500 shares of stock in the Megabux Corporation.He is pleased to learn that the company earned a very nice profit over the most recent operating period.The company has announced that they will pay each shareholder a dividend of $1 per share out of the after-tax profits.Because Megabux has already paid taxes on this profit,this payment will represent tax-free income to Joe.

Accepted Answer

A) True 
 B)False

Question 20

What is the term for clauses in senior management contracts that can compensate executives with millions of dollars in severance pay?

Accepted Answer

A) golden parachutes 
B) silver spoons 
C) bomb shelters 
D) indenture agreements 
A) golden parachutes 
B) silver spoons 
C) bomb shelters 
D) indenture agreements

What is the term for the party in a franchise relationship that pays for the right to use resources supplied by another business entity?

What is an advantage of a corporation?

What is a partnership? Describe the basic features of the three major types of partnerships: general partnerships,limited partnerships,and limited liability partnerships.

Examples of institutional investors are mutual funds,insurance companies,and pension funds.

Mergers and acquisitions basically mean the same thing; the only difference is the size of the companies involved.

Firms that want to improve the integration of production activities or increase their control over the supply of inputs would be likely to consider what type of merger?

What type of liability do sole proprietors have for the debts of their companies?

Shareholders are required to purchase common stock before they can purchase preferred stock.

One advantage of a general corporation is that it is easy and inexpensive to form.

Unlike other types of corporations,not-for-profit corporations cannot have shareholders and cannot pay dividends.

Suzanne Limley was just elected to the board of directors at United Bank Corporation.As a board member,who is she expected to represent the interests of?

A corporation is a form of business ownership in which the business is considered a legal entity separate and distinct from its owners.

One reason given to justify a conglomerate merger is the desire to diversify into new markets,thus reducing the risk associated with adverse conditions in any single market.

Which of the following is a disadvantage of a sole proprietorship?

What is a disadvantage of corporations as a form of ownership?

One of the biggest trends in franchising over the past several years has been a rapid expansion into foreign markets.

A business format franchise is a broad franchise agreement in which the franchisee pays for the right to use the name,trademark,and business and production methods of the franchisor.

Explain why general corporations have become the dominant form of business ownership.

What is the term for clauses in senior management contracts that can compensate executives with millions of dollars in severance pay?

Business Now: Change Is the Only Constant

Business Communication: Creating and Delivering Messages That Matter

Business Ethics and Social Responsibility: Doing Well by Doing Good

Economics: the Framework for Business

Small Business and Entrepreneurship: Economic Rocket Fuel

Accounting: Decision Making by the Numbers

Finance: Acquiring and Using Funds to Maximize Value

Securities Markets : Trading Financial Resources

Marketing: Building Profitable Customer Connections

Part 1: Product and Promotion: Creating and Communicating Value

Part 2: Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, right Person, right Place, right Price

Management, motivation, and Leadership: Bringing Business to Life

Human Resource Management: Building a Top-Quality Workforce

Managing Information and Technology: Finding New Ways to Learn and Link

Operations Management: Putting It All Together

The World Marketplace: Business Without Borders

Labour-Management Relations

Business Law

Personal Finance

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Exam 5: Business Formation: Choosing the Form That Fits

What is the term for the party in a franchise relationship that pays for the right to use resources supplied by another business entity?

What is an advantage of a corporation?

What is a partnership? Describe the basic features of the three major types of partnerships: general partnerships,limited partnerships,and limited liability partnerships.

Examples of institutional investors are mutual funds,insurance companies,and pension funds.

Mergers and acquisitions basically mean the same thing; the only difference is the size of the companies involved.

Firms that want to improve the integration of production activities or increase their control over the supply of inputs would be likely to consider what type of merger?

What type of liability do sole proprietors have for the debts of their companies?

Shareholders are required to purchase common stock before they can purchase preferred stock.

One advantage of a general corporation is that it is easy and inexpensive to form.

Unlike other types of corporations,not-for-profit corporations cannot have shareholders and cannot pay dividends.

Suzanne Limley was just elected to the board of directors at United Bank Corporation.As a board member,who is she expected to represent the interests of?

A corporation is a form of business ownership in which the business is considered a legal entity separate and distinct from its owners.

One reason given to justify a conglomerate merger is the desire to diversify into new markets,thus reducing the risk associated with adverse conditions in any single market.

Which of the following is a disadvantage of a sole proprietorship?

What is a disadvantage of corporations as a form of ownership?

One of the biggest trends in franchising over the past several years has been a rapid expansion into foreign markets.

A business format franchise is a broad franchise agreement in which the franchisee pays for the right to use the name,trademark,and business and production methods of the franchisor.

Explain why general corporations have become the dominant form of business ownership.

What is the term for clauses in senior management contracts that can compensate executives with millions of dollars in severance pay?

Business Now: Change Is the Only Constant

Business Communication: Creating and Delivering Messages That Matter

Business Ethics and Social Responsibility: Doing Well by Doing Good

Economics: the Framework for Business

Small Business and Entrepreneurship: Economic Rocket Fuel

Accounting: Decision Making by the Numbers

Finance: Acquiring and Using Funds to Maximize Value

Securities Markets : Trading Financial Resources

Marketing: Building Profitable Customer Connections

Part 1: Product and Promotion: Creating and Communicating Value

Part 2: Product and Promotion: Creating and Communicating Value

Distribution and Pricing: Right Product, right Person, right Place, right Price

Management, motivation, and Leadership: Bringing Business to Life

Human Resource Management: Building a Top-Quality Workforce

Managing Information and Technology: Finding New Ways to Learn and Link

Operations Management: Putting It All Together

The World Marketplace: Business Without Borders

Labour-Management Relations

Business Law

Personal Finance

Filters