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Study Resources (Business Management)

  251.One reason many companies do not organize themselves as an S corporation is that this form of business:  A. is subject to a higher tax rate than a general partnership. B. does not provide owners with limited liability. C. has a special eligibility restriction, which many businesses are unable to meet. D. is much more difficult to set.
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  181.It is not unusual for members of cooperatives to work for and help manage their cooperative.  182.Farm cooperatives were originally established to help farmers increase their economic power by acting as a group rather than as individuals.  183.The companies Blue Diamond, Ocean Spray, and Land O'Lakes are well-known cooperatives.  184.A disadvantage of farm.
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  161.Franchisors sometimes pay reverse royalties to franchisees if it is evident that the franchisor's Internet sales have negatively impacted the profits of traditional bricks and mortar franchisee businesses.  162.In a typical franchise agreement, the franchisor pays the franchisee a fee to manage its company, and the two of them split the.
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  201.Any debts or damages incurred by a firm organized as a sole proprietorship are:  A. the responsibility of the owner. B. limited to the amount the owner has invested in the firm. C. paid for out of a reserve contingency fund that sole proprietors are required by law to set up. D. normally covered by liability insurance. 202.An entrepreneur.
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  81.A foreign corporation is chartered in a country outside the U.S.  82.Delaware is a popular state in which to seek incorporation due to its reduced costs and other perks.  83.A closed corporation is one whose stock is held by a few people and is not available to the general public.  84.A nonprofit corporation.
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  261.The organizational structure of a corporation permits:  A. the company management to elect the Board of Directors. B. stockholders to elect the Board of Directors. C. stockholders to elect the officers and management team. D. employees (by committee) to elect the officers of the company. 262.Which of the following statements is the most accurate? A foreign corporation:  A. does business in.
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  131.In recent years, foreign firms were reluctant to merge with or acquire American corporations.  132.A merger is a mutual agreement where a firm joins together with another firm, whereas an acquisition is when one firm purchases the assets and obligations of another firm.  133.One reason that a firm would choose to merge.
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  271.Although it is a small company, Zorn Enterprises owns a large number of inexpensive rental housing units in Texas and Louisiana. Currently, the company is a chartered C corporation, but the owners are interested in switching to be an S corporation. After consulting a lawyer, they learned that Zorn Enterprises.
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  251.When working with international firms, U.S. businesses:  A. tend to ignore the ethics of their international partners. B. expect socially responsible behavior from their business partners. C. feel that their responsibility is limited to the United States. D. try to avoid judging our international business partners by U.S. standards. 252.Top leaders in government and business today are:  A. held to higher.
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  241.Which of the following statements about the operation of a corporation is correct?  A. A corporation receives its charter from a state government. B. A corporate charter automatically expires in 99 years and must be renewed if the corporation wants to remain in business. C. Owners of a corporation have unlimited liability for any claims against.
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  270.Identify and discuss the social responsibilities of a firm to three of the four stakeholder groups described in your textbook.  271.Provide examples that serve to explain the differences among the following terms: (1) corporate responsibility; (2) corporate social initiatives; (3) corporate philanthropy.      .
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  221.When entering into a new partnership, a good strategy is to:  A. avoid putting the agreement in writing since this would limit the flexibility of the partnership. B. put the partnership agreement in writing. C. plan to incorporate as soon as possible. D. agree to put the first year's profits back into the partnership. 222.One difference between partnerships and.
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  21.Successful entrepreneurs often make use of professional managers to introduce new ideas.  22.Micropreneurs is a term used to describe entrepreneurs who focus on the continued growth of their businesses.  23.The most important difference between entrepreneurs and micropreneurs is the focus placed by micropreneurs on balancing the demands of work and family.  24.The primary.
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  191.____________ comprise about 20% of all businesses but account for about 81% of U.S. business receipts.  A. Corporations B. Partnerships C. Sole proprietorships D. Limited liability companies 192.To many businesspeople, one of the major attractions of a sole proprietorship is:  A. the ability to obtain additional financial resources. B. the protection of limited liability. C. an unlimited lifespan. D. the chance to be their own boss. 193.The __________.
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  101.The organization structure of a corporation allows for stockholders to exert a significant degree of control over the company's daily operations.  102.Public utilities are examples of quasi-public corporations.  103.In order to establish a C corporation, it is a requirement that investors run the company, whereas in an S corporation, this is not.
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  51.State governments create new start-up business organizations called enterprise zones that are later sold to private investors.  52.The Spotlight on Small Business box is testimonial to the fact that entrepreneurs are problem solvers.  53.Juanita wants to operate her own business. Although she admits it would be nice to earn a healthy profit,.
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  Essay Questions 342.Although most new firms start out as sole proprietorships, few large firms are organized this way. Why is the sole proprietorship such a popular form of ownership for new firms? What features of the sole proprietorship make it unattractive to growing firms?      .
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  11.If you have managerial skills and leadership ability, you also posses the personality to be an entrepreneur.  12.Because of the stress of being in business for yourself, it's important that entrepreneurs have people around them to help replenish their enthusiasm.  13.Successful entrepreneurs rely on others for direction and support.  14.Successful entrepreneurs accept the.
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  121.The three major types of mergers are acquisition, joint, and connective.  122.An acquisition is when one company buys the property and obligations of another company.  123.Taking a firm private involves converting a firm from a corporation to a general partnership.  124.If firms wish to gain market share in their current market, they would.
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  31.Micropreneurs are exempt from the local ordinances that restrict home-based businesses from operating in residential areas.  32.One advantage enjoyed by home-based businesses is the relative ease in attracting new customers.  33.Small businesses have not significantly participated in web-based online sales.  34.The Internet provides a resource for entrepreneurs for information regarding the steps needed.
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  291.In a leveraged buyout, the managers of a firm, its employees, or other investors:  A. move the company elsewhere and start over. B. obtain the assets of the company through bankruptcy proceedings. C. borrow funds to buy out the firm's stockholders. D. negotiate a merger with another firm to create a conglomerate. 292.When investors successfully take a firm private,.
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  11.The profits of a sole proprietorship are taxed as the personal income of the owner.  12.The sole proprietorship form of ownership tends to be attractive to people who want to invest in a company without taking an active role in management.  13.A major advantage of sole proprietorships is that an owner has.
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  91.One advantage of an S Corporation is that the profits are distributed to the owners and taxed as each owner's personal income, thus avoiding the problem of double taxation.  92.By filling out the correct paperwork annually, any corporation can qualify to be classified as an S corporation.  93.A company that loses its.
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  41.One advantage of a partnership is that there is a simple process for partners to terminate their business.  42.Compared to sole proprietorships, an advantage of partnerships is their ability to obtain more financial resources.  43.Setting up a partnership under the terms of a written agreement is a bad idea, because written agreements.
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  41.The U.S. government offers investor visas to attract more entrepreneurs.  42.The position of our government is to restrict foreign entrepreneurs from operating within the U.S.  43.Business incubators provide assistance to established companies attempting to generate foreign sales.  44.A National Business Incubator Association study indicates that over 85 percent of incubator graduates remain in.
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  141.Cory Raider is leading a group of stockholders who want to take the Bigbux Corporation private. If Cory's group succeeds, Bigbux's stock will no longer be available to investors on the open market.  142.Due to several years of poor performance, Scrappy's Metal Fabrication, Inc., is closing. Through the use of debt.
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  True / False Questions 1.The corporation is the most common form of business ownership.  2.The three major forms of business ownership in the U.S. are sole proprietorships, partnerships, and corporations.  3.Few people today start their own business.  4.Once a business is established, it's almost impossible to change from one form of business ownership to.
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  151.The coattail effect refers to the burden of corporate rules and regulations on franchisees.  152.The coattail effect refers to inevitable repercussions on your business if a fellow franchisee should fail.  153.One drawback of franchises is that they have a higher failure rate than other types of business ventures.  154.The franchisee pays the franchisor.
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  311._____________ is by far the most popular target for American franchisors seeking to establish franchises in other countries.  A. Canada B. Mexico C. Great Britain D. Japan 312.Franchised businesses are successful (both domestically and internationally) because:  A. they require very little start-up revenue. B. people prefer the owners and employees of franchised businesses. C. laws require franchisors to provide the same level of service to.
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  111.A group of medical doctors are interested in incorporating their business. There is no advantage due to the costs involved.  112.Nutty Dough is a small chain of donut shops currently owned and operated by a group of seven partners. The owners think that their chain has the potential for rapid growth,.
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  301.A(n) _____________ is a company that has a proven business model and is willing to sell the rights to use the business model to others so that they can sell the same product or service within a given territory.  A. intrapreneur B. franchisee C. limited partner D. franchisor 302.A person who buys the right to use a business name.
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  Mini-Case   Harry, Sirly, and Bo are in the midst of a heated discussion. As the chief operating officers of the U-Scream Ice Cream Corporation, they are reviewing the latest financial reports. Intense competition has resulted in deceased profits. Each of the three officers has his own view of how to reverse.
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  21.Unlike partnerships, if sole proprietorships find themselves in bankruptcy, they need not worry about a court of law requiring them to sell off personal assets to pay for the debts of the firm.  22.Eric wants to start a business. He is attracted to the idea of being his own boss, and.
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  True / False Questions 1.Entrepreneurship involves accepting the risk of starting and running a business.  2.Entrepreneurship is another name for management.  3.Entrepreneurs are less important now than in the past to the U.S. economy.  4.According to the Spotlight on Small Business box, people between 16 to 34 years old are not attracted to starting.
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  71.The stockholders in a corporation elect a board of directors to oversee the company's major policy issues.  72.Stockholders in a corporation exert a significant degree of control over the company's daily operations.  73.Stockholders in a corporation have limited liability.  74.Stockholders in a corporation entrust control over the company's daily operations to managers selected.
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  211.Selma owns a roofing business. She enjoys being her own boss, but her satisfaction comes at a price. Her days are filled with organizing the activities of her employees and soliciting new customers. She often misses activities with friends and family because of the obligations of running her own business..
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  31.A limited partnership consists of one or more general partners and one or more limited partners.  32.Although shares of master limited partnerships can be purchased on one of the national stock exchanges, these companies are taxed like partnerships.  33.The Uniform Partnership Act is law in every state except Louisiana.  34.According to the Uniform.
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  281.When two companies in the same industry agree to become one firm, the result is called a:  A. vertical merger. B. joint venture. C. monopoly. D. horizontal merger. 282.When two companies in completely unrelated industries agree to become one firm, the result is called a:  A. vertical merger. B. joint venture. C. conglomerate merger. D. horizontal merger. 283.A conglomerate merger will:  A. diversify business operations and investments. B. allow the firm to.
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  321.Midas Muffler sells franchises to prospective businesspersons who want to use the Midas name and offer Midas products. In a franchise arrangement, Midas would be the ________, and the buyer of the franchise is the ________.  A. owner; limited partner B. co-signer; co-signee C. franchisor; franchisee D. franchisee; franchisor 322.Jenna plans to invest in a cleaning service franchise called.
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  61.In today's economy, only large business enterprises should operate as corporations.  62.The owners of a corporation are known as general corporate partners.  63.A corporation can raise financial capital by selling shares of stock to interested investors.  64.Stockholders in a corporation accept unlimited liability for the corporation's debts.  65.A disadvantage of corporations is that their.
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  51.The fairest way to handle profits in any partnership arrangement is to divide things evenly. If there are two owners in the business, each gets 50%. If there are three owners (even if one is a limited partner), each gets 33.333% of any accumulated profits.  52.Ted and Mark are partners in.
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  331.People who form cooperatives:  A. believe the government should play a larger role in the economy. B. dislike the notion of having owners, managers, and customers as separate individuals with separate goals. C. see competitive behavior as the key to ensuring rapid economic growth. D. want to find a way to supply basic necessities free of charge to.
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