QUESTION Manuel owns and operates a tow truck company by himself. His busiest times are usually holidays and long weekends, when lots of people are traveling and lots of cars are on the road. Working these times means Manuel is experiencing which drawback of being a sole proprietorship? A) having unlimited financial liability, which means […]
QUESTION Lawrence has a small house painting business with two employees. Lawrence’s father gave his son startup money and occasionally contributes to the business financially when Lawrence is having a cash flow problem but has nothing to do with the running of the business. Lawrence always pays his father back out of business profits. What […]
QUESTION In going multinational, the CEO is excited about the opportunity for PyraTex to create decent jobs that will promote the local economy in Vietnam. The CFO is skeptical, arguing that the best way to increase profits from a foreign production plant is to pay workers the lowest wages possible. Which of the following statements […]
QUESTION The percentage of franchises in the United States owned by minorities has fallen since 2000. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Minorities (African American, Hispanic, Asian American, Indian American, and so on) are said to own over 15 percent of U.S. franchises, up from 5 percent to […]
QUESTION One of the benefits of being a sole proprietor is unlimited financial liability. Indicate whether the statement is true or false. ANSWER Answer: FALSE Explanation: Unlimited financial liability is one of the drawbacks of being a sole proprietor.
QUESTION Bonnie’s Bon Bons is a successful retail chain with franchises all over the country, but it has no presence on the Internet. Catherine’s Confections is a successful mail-order business with no storefront presence. The two companies decided to merge, which immediately gave Bonnie’s Bon Bons an Internet presence and opened the door to customers […]
QUESTION PyraTex’s chief financial officer is concerned that opening a plant in Vietnam to sell its products there might not be profitable. He argues this point on the basis of his belief that emerging markets are not worth selling to and that more-established markets are always preferable ones in which to do business. Which of […]
QUESTION One of the disadvantages of being a sole proprietor is difficulty in selling or passing along the business. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: Although some sole proprietors are able to sell the business to someone or pass it along to their heirs as part of their […]
QUESTION In a master limited partnership, the partnership sells stock on a stock exchange, but pays a lesser rate than the corporate income tax. Indicate whether the statement is true or false. ANSWER Answer: TRUE Explanation: In a master limited partnership, the partnership acts like a corporation, selling stock, but is taxed at a […]
QUESTION Marilyn and her sister Sharon opened a business that sold homemade bath products in decorative baskets. After many successful years, Marilyn wanted to hand down her part of the business to her daughter, Louise. But Sharon did not want to partner with Louise. Sharon insisted that Marilyn sell her Marilyn’s share of the business. […]
