Question 1

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 merger.F) None of the above
G) B) and E)

Question 2

Habitat for Humanity and Girl Scouts are both examples of

Accepted Answer

A)  cooperatives.
B)  quasi-government corporations.
C)  limited-liability corporations.
D)  cooperatives
E)  not-for-profit corporations.F) A) and C)
G) All of the above

Question 3

Prudential and several other large insurance companies have joined together to underwrite an extremely large insurance policy. This sort of association is referred to as a(n)

Accepted Answer

A)  syndicate.
B)  cooperative.
C)  conglomerate.
D)  alliance.
E)  vertical merger.F) A) and C)
G) C) and E)

Question 4

How can the following quotation best be explained: "Stockholders control the activities of a corporation"?

Accepted Answer

A)  All stockholders vote on all the major issues and problems that a company faces on a monthly basis.
B)  Stockholders are intricately involved in the daily operations of a corporation.
C)  Stockholders elect the board of directors, and this board is responsible for appointing corporate officers who manage the daily business of the corporation.
D)  Stockholders vote for the members of the board of directors, and this board makes all the daily business decisions for the corporation.
E)  Stockholders usually call company management and tell executives better ways to run the organization.F) D) and E)
G) A) and E)

Question 5

Tracy is considering expanding his business and has several potential new investors in mind. He originally wanted to form an S-corporation to protect the liability of the investors, but he is now considering a limited-liability company instead because he knows there can be only ____ stockholders in an S-corporation.

Accepted Answer

A)  10
B)  25
C)  50
D)  100
E)  108F) All of the above
G) C) and D)

Question 6

A hostile takeover is a situation in which

Accepted Answer

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

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

A ____ is a merger between firms operating at different but related levels in the production and marketing of a product.

Accepted Answer

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

Question 9

If the owner of a sole proprietorship retires or dies, the owner's heirs may take over the business and either sell it or continue to operate it.

Accepted Answer

A) True 
 B)False

Question 10

Because there are two or more people in a general partnership, bankers, suppliers, and other creditors are not concerned about unlimited liability.

Accepted Answer

A) True 
 B)False

Question 11

What is the difference between a joint venture and a syndicate?

Accepted Answer

A joint venture is an agreement between ...

Question 12

Preferred stockholders receive dividends before dividends are paid to common stockholders.

Accepted Answer

A) True 
 B)False

Question 13

Quarrels among business associates have become common. The associates quarrel over what products the firm should sell, division of authority, selection of personnel, whether to bring family members into the business, whether to expand, and who is contributing most to the firm's success. Such feuding, which damages business relationships, occurs most frequently in what form of business?

Accepted Answer

A)  Partnerships
B)  Cooperatives
C)  Corporations
D)  Sole proprietorships
E)  S-corporationsF) B) and C)
G) A) and C)

Question 14

Which of the following statements is true?

Accepted Answer

A)  Economists and financial analysts agree that mergers are good for the economy.
B)  Takeovers always increase a firm's productivity.
C)  Mergers in the first part of the twenty-first century will see an increase in debt financing.
D)  Mergers in the first part of the twenty-first century will be driven by cash-rich companies looking to acquire businesses that will enhance their position in the marketplace.
E)  There will be fewer mergers that involve investors from other countries.F) A) and B)
G) A) and C)

Question 15

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 B)
G) C) and D)

Question 16

​Everett wants to start a sports club to benefit inner-city children and teach them rock climbing, mountaineering, and other outdoor sports. He wants to take donations to support the club rather than sell stock. What business form would be best for this club?

Accepted Answer

A)  ​Not-for-profit corporation.
B)  ​S-corporation.
C)  ​Partnership.
D)  ​Syndicate.E) A) and D)
F) None of the above

Question 17

​If Pizza Hut and Papa John's Pizza united to become the new company of Papa's Hut, what transaction created the new company?

Accepted Answer

A)  ​Horizontal merger.
B)  ​Vertical acquisition.
C)  ​Horizontal melding.
D)  ​Proxy war.E) B) and C)
F) A) and D)

Question 18

What are the primary responsibilities of the board of directors? What do corporate officers manage?

Accepted Answer

The major responsibilities of the board ...

Question 19

Angela is tired of her boss as well as corporate America in general. She decides she would like to start a business where no one tells her what to do, and she can always make the decisions. The best form of business for Angela is a(n)

Accepted Answer

A)  partnership.
B)  limited partnership.
C)  singleship.
D)  sole proprietorship.
E)  S-corporation.F) A) and C)
G) All of the above

Question 20

Shane is looking for ways to get more capital for his appliance sales and service business. He is very protective of his company's information and fears that it will get into the wrong hands. Shane would probably not want to

Accepted Answer

A)  hire new employees.
B)  incorporate his company.
C)  get a loan from a bank.
D)  take on a trustworthy friend as a partner.
E)  use a computerized accounting system.F) None of the above
G) B) and E)

Exam 4: Choosing a Form of Business Ownership

Prudential and several other large insurance companies have joined together to underwrite an extremely large insurance policy. This sort of association is referred to as a(n)

Correct Answer
verified

What are the primary responsibilities of the board of directors? What do corporate officers manage?

Correct Answer
verified
The major responsibilities of the board ...
View Answer

A ____ is a merger between firms operating at different but related levels in the production and marketing of a product.

Correct Answer
verified

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

Correct Answer
verified

Because there are two or more people in a general partnership, bankers, suppliers, and other creditors are not concerned about unlimited liability.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

A hostile takeover is a situation in which

Correct Answer
verified

Preferred stockholders receive dividends before dividends are paid to common stockholders.

Correct Answer
verified

Everett wants to start a sports club to benefit inner-city children and teach them rock climbing, mountaineering, and other outdoor sports. He wants to take donations to support the club rather than sell stock. What business form would be best for this club?

Correct Answer
verified

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

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

Shane is looking for ways to get more capital for his appliance sales and service business. He is very protective of his company's information and fears that it will get into the wrong hands. Shane would probably not want to

Correct Answer
verified

If Pizza Hut and Papa John's Pizza united to become the new company of Papa's Hut, what transaction created the new company?

Correct Answer
verified

How can the following quotation best be explained: "Stockholders control the activities of a corporation"?

Correct Answer
verified

If the owner of a sole proprietorship retires or dies, the owner's heirs may take over the business and either sell it or continue to operate it.

Correct Answer
verified

Which of the following statements is true?

Correct Answer
verified

Angela is tired of her boss as well as corporate America in general. She decides she would like to start a business where no one tells her what to do, and she can always make the decisions. The best form of business for Angela is a(n)

Correct Answer
verified

What is the difference between a joint venture and a syndicate?

Correct Answer
verified
A joint venture is an agreement between ...
View Answer

Habitat for Humanity and Girl Scouts are both examples of

Correct Answer
verified

Exam 4: Choosing a Form of Business Ownership

Prudential and several other large insurance companies have joined together to underwrite an extremely large insurance policy. This sort of association is referred to as a(n)

Correct AnswerverifiedShow Answer

What are the primary responsibilities of the board of directors? What do corporate officers manage?

Correct AnswerverifiedThe major responsibilities of the board ...View AnswerShow Answer

A ____ is a merger between firms operating at different but related levels in the production and marketing of a product.

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Because there are two or more people in a general partnership, bankers, suppliers, and other creditors are not concerned about unlimited liability.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

A hostile takeover is a situation in which

Correct AnswerverifiedShow Answer

Preferred stockholders receive dividends before dividends are paid to common stockholders.

Correct AnswerverifiedShow Answer

​Everett wants to start a sports club to benefit inner-city children and teach them rock climbing, mountaineering, and other outdoor sports. He wants to take donations to support the club rather than sell stock. What business form would be best for this club?

Correct AnswerverifiedShow Answer

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

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

Shane is looking for ways to get more capital for his appliance sales and service business. He is very protective of his company's information and fears that it will get into the wrong hands. Shane would probably not want to

Correct AnswerverifiedShow Answer

​If Pizza Hut and Papa John's Pizza united to become the new company of Papa's Hut, what transaction created the new company?

Correct AnswerverifiedShow Answer

How can the following quotation best be explained: "Stockholders control the activities of a corporation"?

Correct AnswerverifiedShow Answer

If the owner of a sole proprietorship retires or dies, the owner's heirs may take over the business and either sell it or continue to operate it.

Correct AnswerverifiedShow Answer

Which of the following statements is true?

Correct AnswerverifiedShow Answer

Angela is tired of her boss as well as corporate America in general. She decides she would like to start a business where no one tells her what to do, and she can always make the decisions. The best form of business for Angela is a(n)

Correct AnswerverifiedShow Answer

What is the difference between a joint venture and a syndicate?

Correct AnswerverifiedA joint venture is an agreement between ...View AnswerShow Answer

Habitat for Humanity and Girl Scouts are both examples of

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified
The major responsibilities of the board ...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Everett wants to start a sports club to benefit inner-city children and teach them rock climbing, mountaineering, and other outdoor sports. He wants to take donations to support the club rather than sell stock. What business form would be best for this club?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

If Pizza Hut and Papa John's Pizza united to become the new company of Papa's Hut, what transaction created the new company?

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
A joint venture is an agreement between ...
View Answer

Correct Answer
verified