JB Practice for Exam 2

The ________ is the most common form of business ownership.

• partnership

• corporation

• joint venture

• sole proprietorship

A small group of apple orchard owners came together to sell their apples & related products to get better pricing.

• Merger

• Cooperative

• Franchise

• Joint Venture

Entrepreneurs applying for a bank loan should expect that lenders will:

• Expect a business plan

• Expect a share in the ownership of the company

• Only offer a short-term, high interest loan

• Only provide loans to entrepreneurs who have started other businesses.

If a C Corp goes bankrupt, the owners:

• will qualify for state or federal reimbursement for losses of the corp.

• lose their investment, but will not incur losses beyond their investment

• be entitled to full reimbursement by the firm of all investment losses

• be held personally responsible for all remaining debts

What is normally considered a disadvantage of the corporate form of business?

• limited liability of owners

• difficult transfer of ownership

• limited life

• double taxation of earnings

Three types of corporate mergers are:

• economic, geographic, and strategic.

• vertical, horizontal, and conglomerate.

• flexible, differentiated, and conditional.

• explicit, implicit, and intrinsic.

One reason we have seen continued growth in home-based businesses is:

• the location offers a more secure operational environment.

• affordable technology makes it easier to compete.

• people need something to do while they wait to return to their regular job.

• it's less risky to start a home business than other types of businesses.

The difference between a merger and an acquisition is:

• merger doesn't combine assets & liabilities of firms, but acquisition does.

• a merger combines assets of 2 firms but each company keep their liabilities.

• merger joins resources of 2 firms to become 1 firm; acquisition is a buyout.

• acquisition joins resources of 2 firms to become 1 firm; merger is a buyout.

A creative person working within a corporation to launch new products and generate new profits is known as a(n) ________.

• arbitrator

• micropreneur

• intrapreneur

• macropreneur

A general partner takes a temporary leave & asks a limited partner to perform her managerial duties. The Ltd. partner:

• can fill in as a manager as long as it is for only a limited time.

• can make managerial decisions but they can't involve the payment of money.

• cannot participate in the management of the partnership

• can manage the firm with approval from the other general partners.