Question 1

A vertical merger is a merger between firms that operate at different but related levels in the production and marketing of a product.

Accepted Answer

A) True 
 B)False

Question 2

Because of limited liability, individuals are more willing to invest in corporations than in other forms of business.

Accepted Answer

A) True 
 B)False

Question 3

Most partnerships have ____ partners.

Accepted Answer

A)   two
B)   three
C)   four
D)   five
E)   more than fiveF) A) and B)
G) A) and C)

Question 4

Jack has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college.Jack hesitates because he knows that it is ____ to invest money in a partnership and ____ to get the money back out.

Accepted Answer

A)   difficult; difficult
B)   easy; difficult
C)   easy; impossible
D)   easy; easy
E)   difficult; easyF) All of the above
G) A) and C)

Question 5

Ted's partnership agreement with two other men was a bit unsound.One of the problems the men were encountering was uneven productivity among the partners.The agreement required each partner to contribute to every aspect of the business to receive an equal portion of the profits.This agreement did not reflect the idea that

Accepted Answer

A)   all partners need not be equal; that is, there are different types of partners.Some may be fully active in running the business, whereas others may have a more limited role.
B)   general partners are required to be active in day-to-day business operations.
C)   customers and creditors of a limited partnership need not be protected.
D)   the Uniform Partnership Act requires every general partnership to have at least one limited partner.
E)   each partner may enter into contracts on behalf of all the others.F) C) and D)
G) A) and B)

Question 6

Wade serves on Foot Locker's board of directors.How did Wade get this position?

Accepted Answer

A)   He volunteered for the assignment.
B)   He was appointed by the chief executive officer.
C)   He was assigned by the Federal Trade Commission.
D)   Through default as the largest stockholder, Wade got the position.
E)   He was elected by the company's stockholders.F) B) and E)
G) A) and B)

Question 7

Why would a partnership have more capital available to it than would a sole proprietorship?

Accepted Answer

A partnership may have more capital avai...

Question 8

A merger between two firms that make and sell similar products in similar markets is known as a _____.

Accepted Answer

A)   horizontal merger
B)   cooperative
C)   joint venture
D)   vertical merger
E)   conglomerate mergerF) B) and D)
G) B) and C)

Question 9

In your own words, explain the differences among a horizontal merger, a vertical merger, and a conglomerate merger.

Accepted Answer

A horizontal merger occurs when two comp...

Question 10

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

Accepted Answer

A)   partnership
B)   corporation
C)   sole proprietorship
D)   conglomerate
E)   syndicateF) A) and B)
G) All of the above

Question 11

Profits of a large corporation are taxed twice, once as corporate income and again as personal income of stockholders.

Accepted Answer

A) True 
 B)False

Question 12

What does the board of directors manage? What do corporate officers manage?

Accepted Answer

The board of directors and corporate off...

Question 13

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 realized it was a fairly common practice.He recognized 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.If the company had decided to let the managers have the opportunity to purchase the company and take it private with borrowed funds rather than merge with a competitor, it would have been considered a _____.

Accepted Answer

A)   leveraged buyout
B)   proxy buyout
C)   tender buyout
D)   cooperative buyout
E)   simple buyoutF) A) and B)
G) B) and E)

Question 14

Amy owns 100 shares of General Electric preferred stock.She wants to attend the annual stockholder meeting to cast her vote on company issues.Based on your knowledge from school, you caution Amy that

Accepted Answer

A)   people with fewer than 1,000 shares of stock cannot vote.
B)   stockholders are not allowed to attend the annual meetings.
C)   most preferred stock does not have voting rights.
D)   only institutional investors are allowed to attend the meetings.
E)   she can vote only by proxy and not in person.F) D) and E)
G) A) and B)

Question 15

Unlike a person, a corporation exists only on paper.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is an example of a vertical merger?

Accepted Answer

A)   the purchase of TWA by American Airlines
B)   the purchase of Marathon Oil Company by U.S.Steel
C)   the purchase of Kentucky Fried Chicken by PepsiCo
D)   the purchase of Malone's Cost-Plus Supermarkets by the Kroger supermarket chain
E)   the purchase of Gulf Oil by Standard Oil Company of CaliforniaF) B) and D)
G) A) and E)

Question 17

When many banks join together to lend money to developing countries such as Bangladesh and Malaysia, they seek to spread out the risk of default.This is called _____.

Accepted Answer

A)   a not-for-profit organization
B)   a cooperative
C)   diversification
D)   a quasi-government corporation
E)   a syndicateF) B) and E)
G) A) and D)

Question 18

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

Accepted Answer

A)   one person could not possibly run this type of business.
B)   Brian will receive all of the profits from the partnership.
C)   together they will be able to get more capital and credit to start the business.
D)   the business will pay less taxes than it would as a sole proprietorship.
E)   there are generally fewer control issues in a partnership than in a sole proprietorship.F) A) and C)
G) C) and D)

Question 19

Compare and contrast common stock and preferred stock.Which would you rather own? Why?

Accepted Answer

Common stock and preferred stock are two...

Question 20

Which of the following would least likely be stated in the articles of partnership?

Accepted Answer

A)   Who will make the final decisions.
B)   How much each partner will invest.
C)   What the duties of each partner are.
D)   What products the company will sell.
E)   What will happen if a partner dies or wants to dissolve the partnership.F) A) and B)
G) A) and C)

Exam 4: Choosing a Form of Business Ownership

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

Correct Answer
verified

Why would a partnership have more capital available to it than would a sole proprietorship?

Correct Answer
Answered by ExamLex AI
A partnership may have more capital avai...
View Answer

Because of limited liability, individuals are more willing to invest in corporations than in other forms of business.

Correct Answer
verified

What does the board of directors manage? What do corporate officers manage?

Correct Answer
Answered by ExamLex AI
The board of directors and corporate off...
View Answer

In your own words, explain the differences among a horizontal merger, a vertical merger, and a conglomerate merger.

Correct Answer
Answered by ExamLex AI
A horizontal merger occurs when two comp...
View Answer

Compare and contrast common stock and preferred stock.Which would you rather own? Why?

Correct Answer
Answered by ExamLex AI
Common stock and preferred stock are two...
View Answer

Most partnerships have ____ partners.

Correct Answer
verified

When many banks join together to lend money to developing countries such as Bangladesh and Malaysia, they seek to spread out the risk of default.This is called _____.

Correct Answer
verified

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

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Amy owns 100 shares of General Electric preferred stock.She wants to attend the annual stockholder meeting to cast her vote on company issues.Based on your knowledge from school, you caution Amy that

Correct Answer
verified

Wade serves on Foot Locker's board of directors.How did Wade get this position?

Correct Answer
verified

Which of the following is an example of a vertical merger?

Correct Answer
verified

A vertical merger is a merger between firms that operate at different but related levels in the production and marketing of a product.

Correct Answer
verified

Profits of a large corporation are taxed twice, once as corporate income and again as personal income of stockholders.

Correct Answer
verified

Unlike a person, a corporation exists only on paper.

Correct Answer
verified

Jack has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college.Jack hesitates because he knows that it is to invest money in a partnership and to get the money back out.

Correct Answer
verified

A merger between two firms that make and sell similar products in similar markets is known as a _____.

Correct Answer
verified

Which of the following would least likely be stated in the articles of partnership?

Correct Answer
verified

Exam 4: Choosing a Form of Business Ownership

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

Correct AnswerverifiedShow Answer

Why would a partnership have more capital available to it than would a sole proprietorship?

Correct AnswerAnswered by ExamLex AIA partnership may have more capital avai...View AnswerShow Answer

Because of limited liability, individuals are more willing to invest in corporations than in other forms of business.

Correct AnswerverifiedShow Answer

What does the board of directors manage? What do corporate officers manage?

Correct AnswerAnswered by ExamLex AIThe board of directors and corporate off...View AnswerShow Answer

In your own words, explain the differences among a horizontal merger, a vertical merger, and a conglomerate merger.

Correct AnswerAnswered by ExamLex AIA horizontal merger occurs when two comp...View AnswerShow Answer

Compare and contrast common stock and preferred stock.Which would you rather own? Why?

Correct AnswerAnswered by ExamLex AICommon stock and preferred stock are two...View AnswerShow Answer

Most partnerships have ____ partners.

Correct AnswerverifiedShow Answer

When many banks join together to lend money to developing countries such as Bangladesh and Malaysia, they seek to spread out the risk of default.This is called _____.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Amy owns 100 shares of General Electric preferred stock.She wants to attend the annual stockholder meeting to cast her vote on company issues.Based on your knowledge from school, you caution Amy that

Correct AnswerverifiedShow Answer

Wade serves on Foot Locker's board of directors.How did Wade get this position?

Correct AnswerverifiedShow Answer

Which of the following is an example of a vertical merger?

Correct AnswerverifiedShow Answer

A vertical merger is a merger between firms that operate at different but related levels in the production and marketing of a product.

Correct AnswerverifiedShow Answer

Profits of a large corporation are taxed twice, once as corporate income and again as personal income of stockholders.

Correct AnswerverifiedShow Answer

Unlike a person, a corporation exists only on paper.

Correct AnswerverifiedShow Answer

Jack has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college.Jack hesitates because he knows that it is ____ to invest money in a partnership and ____ to get the money back out.

Correct AnswerverifiedShow Answer

A merger between two firms that make and sell similar products in similar markets is known as a _____.

Correct AnswerverifiedShow Answer

Which of the following would least likely be stated in the articles of partnership?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
A partnership may have more capital avai...
View Answer

Correct Answer
verified

Correct Answer
Answered by ExamLex AI
The board of directors and corporate off...
View Answer

Correct Answer
Answered by ExamLex AI
A horizontal merger occurs when two comp...
View Answer

Correct Answer
Answered by ExamLex AI
Common stock and preferred stock are two...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Jack has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college.Jack hesitates because he knows that it is to invest money in a partnership and to get the money back out.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified