Business Organizations Part 2

What is a disadvantage of having a franchise?

• selling an untested product

• receiving no business training

• sharing the profits with the franchiser

• having competing goals with the franchiser

One disadvantage that corporations face is

• competition

• environmental laws.

• the cost of raw materials.

• double taxation.

An example of a franchise is

• a grocery store.

• a McDonald’s restaurant

• Lulu department store.

• a local dry cleaner.

What is the main risk that Mariam would take if she invests in a corporation?

• that she might be sued if the corporation commits a crime

• that she might lose her house if the corporation goes bankrupt

• that she might lose her job if the corporation’s profits decline

• the value of her stock may decline

Which of the following is an example of a franchise?

• a single gas station named Art’s Fuel and Service

• a local grocery store

• one of a chain of three dry cleaners owned by the same man

• a restaurant that is part of a national chain

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

• A bread bakery acquires a cookie company.

• a shirt company acquires a button manfucaturer

• A Chinese company acquires a U.S. company.

• A computer maker acquires a publisher.

What is a dividend?

• the part of the corporation owned by a stockholder

• the part of the corporation most available to stockholders

• the part of the corporate debt owed by the stockholders

• part of the corporate profits paid to a stockholder

Angela opens a coffee shop, which she owns and where she sells a national brand

of gourmet coffee. She pays licensing fees to do this. What kind of business it this?

• a franchise

• a sole propriotership

• a nonprofit

• a partnership

What is it called when companies that produce the same product merge?

• vertical merger

• horizontal merger

• conglomerate

• multinational corporation

Double taxation is a disadvantage of

• a. corporations

• b. franchises

• c. general partnerships

• d. limited partnerships