Engineering Economics - Elements (Exercise 5)

Which is true about corporation?

• It is the worst type of business organization

• The minimum number of incorporators to start a corporation is three

• Its life is dependent on the lives of the incorporators

• The stock holders of the corporation are only liable to the extent of their investments

Aggregation of individuals formed for the purpose of conducting a business and recognized by law as a fictitious person is called _____.

• Partnership

• Investors

• Corporation

• Stockholders

An association of two or more persons for the purpose of engaging into a business for profit is called _____.

• Entrepreneurship

• Partnership

• Proprietorship

• Corporation

What represents the ownership of stockholders who have a residual claim on the assets of the corporation after all other claims have been settled?

• Authorized capital stock

• Preferred stock

• Incorporator stock

• Common stock

What stock represents ownership and enjoys certain preferences than ordinary stock?

• Authorized stock

• Preferred stock

• Incorporator’s stock

• Presidential stock

The amount of company’s profit that the board of directors of the corporation decides to distribute to ordinary shareholders is called

• Dividend

• Return

• Share of stock

• Equity

What refers to the residual value of a company's assets after all outside liabilities (shareholders excluded) have been allowed for?

• Dividend

• Equity

• Return

• Par value

What refers to the claim of anyone to ownership?

• Proprietorship

• Assets

• Equity

• Liability

Cash money and credit necessary to establish and operate an enterprise are generally called

• Capital

• Funds

• Assets

• Liabilities

What represents the share of participation in business organizations?

• Franchise

• Partnership

• Stock

• Corporation