Question 1

News 24/7,a newspaper group,merged with Alfalah Finance,an investment firm.The two companies merged together to diversify their business and to generate more revenue.This merger will be an example of a _____.

Accepted Answer

A) conglomerate merger 
B) horizontal merger 
C) vertical merger 
D) joint venture

Question 2

Describe how small businesses help create new jobs.

Accepted Answer

The answer of Describe how small businesses help create new...

Question 3

Commercial banks are considered to be financial cooperatives.

Accepted Answer

A) True 
 B)False

Question 4

List the elements contained in a business plan.

Accepted Answer

The answer of List the elements contained in a business...

Question 5

A vertical merger joins firms in the same industry in order to cut costs and promote diversification.

Accepted Answer

A) True 
 B)False

Question 6

Complete the following using the terms listed.
-_____ is a contractual agreement that specifies the methods by which a dealer can produce and market a supplier's good or service.

Accepted Answer

A) small business 
B) corporation 
C) merger 
D) acquisition 
E) horizontal merger
F)conglomerate merger
G)Cooperative
H)vertical merger
I)business incubators
J)business plan
K)alien corporation
L)preferred stock
M)Franchising

Question 7

Strict franchise agreements help to maintain the integrity of the brand.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following is a reason for Krispy Kreme's near failure?

Accepted Answer

A) Consumers felt that its employees were incompetent. 
B) The company lacked funding for its development. 
C) The quality of its donuts was bad. 
D) Consumers preferred its competitors' products.

Question 9

Large businesses must be organized as corporations.

Accepted Answer

A) True 
 B)False

Question 10

A drawback of franchising is that:

Accepted Answer

A) it necessitates the development of new business models for every franchise. 
B) it provides no opportunities for expansion. 
C) it restricts the business to a single geographical location. 
D) it deprives the franchisor of absolute control over his or her business.

Question 11

Traditionally,small businesses tended to be concentrated in the _____ industry.

Accepted Answer

A) manufacturing 
B) retailing 
C) wholesaling 
D) importing/exporting

Question 12

Which of the following statements regarding franchising is FALSE?

Accepted Answer

A) Franchises are riskier than other forms of business ownership. 
B) Franchisees have the benefit of name recognition. 
C) Franchisors provide a wide range of support to franchisees. 
D) Benefits for the franchisor include opportunities for expansion that might not otherwise be available.

Question 13

Three members of Abdul's family work at BioTechno,a multi-national drug manufacturer.Each of them owns 5% shares of the company respectively.In fact,most of the employees of BioTechno,like Abdul and his family members,are stockholders of the company.BioTechno can be regarded as a _____.

Accepted Answer

A) sole proprietorship 
B) employee-owned corporation 
C) family-owned business 
D) partnership

Question 14

How do small businesses contribute to the U.S economy?

Accepted Answer

A) By creating job opportunities 
B) By refraining from market competition 
C) By paying a professional tax higher than other businesses 
D) By adhering to traditional methods of operation

Question 15

A sole proprietor is easy to dissolve.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following statements regarding family-owned businesses is true?

Accepted Answer

A) Only a small percentage of family-owned businesses survive into the second or third generation. 
B) Family-owned companies must submit a written agreement to the state in which it organizes. 
C) All family-owned companies must be closed corporations. 
D) Family-owned companies are an example of a not-for-profit corporation.

Question 17

Latifa is a chief financial officer in a large corporation.She has the full financial authority to make appropriations and authorize expenditures.Latifa is likely to be a member of _____ management.

Accepted Answer

A) Middle 
B) advisory 
C) supervisory 
D) Top

Question 18

Jose is a stockholder in a software consulting firm.He gets a share of the earnings of the firm,on which he has to pay taxes.Moreover,the firm pays taxes on its earnings.As an individual,Jose is not legally liable to pay off the debts that might be incurred by the firm.In this scenario,the software consulting firm can be regarded as a _____.

Accepted Answer

A) sole proprietorship 
B) partnership 
C) corporation 
D) franchise

Question 19

Mariana wants to start an event management firm with two of her friends.She decides to create a business plan that will help her in securing financing for her firm.Which of the following should she include in the business plan?

Accepted Answer

A) A list of her previous clients 
B) A list of the potential lenders 
C) An introduction that includes the objectives of her business 
D) A time frame for selling stock to investors

Question 20

The management of Javier Investments wants to create more job opportunities in their city.They believe that the best way to create more jobs is to help people start their own business.They invest a portion of the company's profit,along with money received through government loans,to support people trying to start their own business.Javier Investments is an example of:

Accepted Answer

A) Unit investment trusts (UITs). 
B) Small Business Investment Companies (SBICs). 
C) Joint ventures. 
D) Business incubators.

Exam 5: Forms of Business Ownership and Organization

News 24/7,a newspaper group,merged with Alfalah Finance,an investment firm.The two companies merged together to diversify their business and to generate more revenue.This merger will be an example of a _____.

Describe how small businesses help create new jobs.

Commercial banks are considered to be financial cooperatives.

List the elements contained in a business plan.

A vertical merger joins firms in the same industry in order to cut costs and promote diversification.

Complete the following using the terms listed. -_____ is a contractual agreement that specifies the methods by which a dealer can produce and market a supplier's good or service.

Strict franchise agreements help to maintain the integrity of the brand.

Which of the following is a reason for Krispy Kreme's near failure?

Large businesses must be organized as corporations.

A drawback of franchising is that:

Traditionally,small businesses tended to be concentrated in the _____ industry.

Which of the following statements regarding franchising is FALSE?

Three members of Abdul's family work at BioTechno,a multi-national drug manufacturer.Each of them owns 5% shares of the company respectively.In fact,most of the employees of BioTechno,like Abdul and his family members,are stockholders of the company.BioTechno can be regarded as a _____.

How do small businesses contribute to the U.S economy?

A sole proprietor is easy to dissolve.

Which of the following statements regarding family-owned businesses is true?

Latifa is a chief financial officer in a large corporation.She has the full financial authority to make appropriations and authorize expenditures.Latifa is likely to be a member of _____ management.

Mariana wants to start an event management firm with two of her friends.She decides to create a business plan that will help her in securing financing for her firm.Which of the following should she include in the business plan?