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Exam 4: Types of Business Ownership

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Question 81

Multiple Choice

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The Smithsonian Institution exists to preserve historical and cultural items of value and to share those items with the public; it does not exist to maximise the wealth of any shareholders.This entity is organised as a(n)

A) cooperative.
B) quasi-government corporation.
C) S-corporation.
D) not-for-profit corporation.
E) closed corporation.

F) A) and B)
G) C) and D)

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Question 82

Multiple Choice

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A hostile takeover is a situation in which

A) the management and board of directors of the targeted firm disapprove of the proposed merger.
B) stockholders are paid a golden parachute.
C) the targeted firm is dismantled to avoid the merger.
D) the government makes the decision that the corporate raider can purchase the targeted firm.
E) the corporate raider receives a sum of money to leave the targeted firm alone.

F) None of the above
G) A) and B)

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Question 83

Multiple Choice

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If Avon and Merck joined together to produce a cream that slows down the aging process, this would be called a(n)

Since someone must be responsible for a partnership's debts, a limited partnership must have at least one general partner.

All of the following are advantages of the partnership form of organisation except

What does double taxation mean?

B&G, Inc. A year ago, Kevin went to work for B&G, Inc.He has worked for the finance department ever since he started.He noticed that the corporation was only taxed as though it were a partnership.This was something that he found very odd when he first started working for the company, but he later realised it was a fairly common practice.He recognised that this was one of the advantages of this type of corporation. While the job was challenging, Kevin was not happy.He wanted to work for a company whose main goal was to provide service to the community, not to make a profit.However, Kevin felt that, considering his present financial situation, he had to continue working for B&G, Inc.A week later, Kevin discovered there was going to be a merger between B&G, Inc.and one of its major competitors.Kevin's boss informed him that he would be getting a promotion and a raise.While he was excited about making more money, he still was not happy.He knew then that he would not be working for the company for long. -Refer to B&G, Inc.B&G, Inc.was going through a ____ merger.

In the state in which it is incorporated, a business is known as a(n)

Recently there have been several mergers involving Big Four accounting firms.One such merger involved the firms of Arthur Young and Ernst & Whinney, who combined to form Ernst & Young.This is an example of a

The weakness of one partner may be offset by another partner's strength.

Lisa and John own a partnership that provides rental equipment for parties and special occasions.Which of the following is true about the way Lisa and John would handle company profits?

The citizens of a number of small rural towns have decided to form an association that will allow them to purchase electricity at a much cheaper rate than they are currently paying.This alliance is referred to as a(n)

Experts predict that mergers in the first part of the twenty-first century will be the result of cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.

A voluntary association of two or more people acting as co-owners of a business is known as a partnership.

Brian wants to start a business that provides canoe and kayak trips.He decides that it would be better to ask his brother Brad to become his partner because

When the owner of a sole trader dies, what becomes of the business?

Your friend Steve owns a considerable amount of ordinary share in Intel, the large microchip manufacturer.He wants to cast his votes on various issues at the annual stockholders' meeting, but he does not have the time to travel a great distance to the meeting.Instead of attending the meeting, Steve decides to register his votes by

A corporation is perhaps the easiest form of business to organise.

The simplest form of business owned and operated by one person is called a(n)

Daniel, Thomas, and Lucas are partners in a law firm under a typical partnership agreement in which each owns an equal share of the business.Thomas dies suddenly of a heart attack.What will most likely become of the partnership?