FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: How to Form a Business

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 1

True/False

Review LaterAdd Note

Review Later

Stockholders in a corporation entrust control over the company's daily operations to managers selected by the board of directors to run the company.

A) True
B) False

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following statements is the most accurate? A foreign corporation:

A) does business in one or more states, but is chartered in another state.
B) is 50% owned by individuals or companies from another nation.
C) is headquartered in another nation.
D) is the same thing as a multinational corporation.

E) None of the above
F) B) and C)

Correct Answer

verified

Show Answer

Question 3

Multiple Choice

Review LaterAdd Note

Jamie and Maria invested all their savings in a small pizzeria they opened outside the University of Western Kentucky. They operated the business as a general partnership. After 11 months, the business went broke and Jamie and Maria were left with outstanding bills of $37,500, which was more than their initial investment in the company. Jamie and Maria can:

The stockholders of large, publicly traded corporations have a daily pulse on the operation of the business.

A prospective franchise owner wants to keep his monthly costs at a minimum. The franchisor he is reviewing is advertising that royalty payments of 8% of sales could be as high as $250,000 per month. The franchisor is claiming that a franchisee can expect monthly sales to be as high as:

One way to eliminate some of the risk of your partners making costly mistakes that could jeopardize your personal assets is to set up a:

When two firms which do not participate in the same industries, for example, a software company and a fast food restaurant company, decide to merge, the result is called a ____________ merger.

It is usually easy to start and end a sole proprietorship.

Farm cooperatives were originally established to help farmers increase their economic power by acting as a group rather than as individuals.

To change ownership in a corporation you simply sell your stock to someone else.

According to the Uniform Partnership Act, the three key elements of any general partnership are:

One reason that a firm would choose to merge or acquire another company would be to gain market share.

Opening and operating a franchise in a different country:

When a sole proprietor dies:

One method to avoid conflicts between partners is to solicit the services of a lawyer to create a well-written partnership agreement.

Although sole proprietors do not pay any special taxes, as the owner of the business you are also an employee of the business, which requires you to:

Mini-Case For as long as she could remember, Jenna Raiter's passion was cars. As a teenager, she spent hours with her dad tinkering with the family car, learning to change the oil and making minor repairs. She got a job at a local garage while still in high school. A few years after graduating from high school and completing the auto mechanics degree at a local community college, Jenna decided she wanted to be her own boss. She quit her job, borrowed some money from her dad, and began her own repair shop, the AutoMotion Garage. Jenna's hard work gradually attracted a loyal clientele of satisfied customers. Her success has her thinking about opening garages in two other locations, but she lacks the financial resources needed for expansion. Furthermore, the success of her business is forcing Jenna to spend more time managing the business and less time doing the actual technical work she still enjoys. She wants to find business partners who can help her with management and provide additional financial resources. She has approached a couple of friends she met in high school: Al Ternator and Lew Banfilter, to see if they would like to join the business. -Jenna approached Al Ternator about joining the business as an owner. She proposed that she continue to provide the technical expertise and deal directly with customers, while Al, who has a college degree in finance, handles many of the financial aspects of running AutoMotion. In addition, Jenna wants Al to contribute some much-needed money for expansion. Under Jenna's proposal, she and Al would operate the business together as:

One drawback of franchises is that they have a higher failure rate than other types of business ventures.

Maria recently purchased 100 shares of stock in Idle Time Gaming, Inc. Maria is a(n) _____________ of this company.

An acquisition is when one company buys the property and obligations of another company.