Business 001 - Introduction to Business » Fall 2021 » Chapter 4 Quiz

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Question #1
Double taxation is a distinct advantage that corporations have over other forms of ownership.
A.   FALSE
B.   TRUE
Question #2
A person who buys a franchise has the same level of control as an entrepreneur who opens his or her own sole proprietorship.
A.   TRUE
B.   FALSE
Question #3
When Whole Foods Market, the world's largest natural foods supermarket, acquired Select Fish, a fish processing company, it was an example of a conglomerate merger.
A.   FALSE
B.   TRUE
Question #4
If the sole proprietorship acquires a legal business name, the owner then has limited liability.
A.   TRUE
B.   FALSE
Question #5
The sole proprietorship is considered a legal entity; therefore, it is taxed separately from the owner.
A.   FALSE
B.   TRUE
Question #6
When Wachovia Bank, acquired First Union Bank Dim S.A., it was an example of a conglomerate merger.
A.   FALSE
B.   TRUE
Question #7
Changing demographics drive the franchise industry growth.
A.   TRUE
B.   FALSE
Question #8
Articles of incorporation usually specify the life of a corporation as a certain number of predetermined years.
A.   FALSE
B.   TRUE
Question #9
In 2004, Albertson's Inc. purchased Southern California's premier fresh, gourmet, and specialty food retailer, Bristol Farms. This was an example of an acquisition.
A.   TRUE
B.   FALSE
Question #10
One of the disadvantages of the sole proprietorship is that the owner has unlimited liability.
A.   TRUE
B.   FALSE
Question #11
With its ease of registration and pro-corporate policies, _____ is called the "state of incorporation." About half of the Fortune 500 companies are incorporated there.
A.   Georgia
B.   Delaware
C.   California
D.   New York
E.   Ohio
Question #12
The form of business ownership that is easiest to dissolve is the:
A.   sole proprietorship
B.   public corporation
C.   subsidiary
D.   limited partnership
E.   cooperative
Question #13
Why would a company choose to engage in a conglomerate merger instead of a vertical or horizontal merger?
A.   It is easier to dissolve a conglomerate merger than the other types of mergers.
B.   The conglomerate merger results in reduced liability while the other two types of mergers do not.
C.   Double taxation does not occur when the merger is with a company outside the normal business environment of the acquiring company.
D.   A conglomerate merger is done to reduce risk.
E.   Government regulation of conglomerate mergers is minimal.
Question #14
The two types of cooperatives are:
A.   member-operated and board-of-director-operated
B.   buyer and seller
C.   retail and wholesale
D.   general liability and limited liability
E.   public and private
Question #15
Jack Smith and four other people own Persimmon Hill Farm, an agric-entertainment farm which provides corn mazes, bonfires, hay rides, and food treats to paying visitors. All of the owners have limited financial risk. Persimmon Hill Farm is a(n):
A.   corporation
B.   multiple proprietorship
C.   limited partnership
D.   strategic alliance
E.   general partnership
Question #16
Which of the following statements about cooperatives is true?
A.   Cooperatives increase their members buying power.
B.   Cooperatives have a limited life span.
C.   Cooperatives cannot legally compete with taxable entities.
D.   Cooperatives have the same liabilities as partnerships.
E.   None of the above statements about cooperatives is true.
Question #17
IBM purchased MRO Software Inc. for $740 million. MRO was a niche provider of software and services to help customers including nuclear power plants and oil companies. IBM, plans to fold MRO into its software unit. This is an example of a(n):
A.   acquisition
B.   voluntary union
C.   conglomerate
D.   merger
E.   joint venture
Question #18
A _____ offers the same liability protection as a corporation but may be taxed as either a partnership or a corporation.
A.   franchise
B.   joint venture
C.   limited liability company
D.   cooperative
E.   C corporation
Question #19
A corporation:
A.   cannot sue or be sued
B.   is one of the easy types of businesses to form
C.   does not have a size limitation
D.   does not have a life separate from its owners
E.   ends when the owner of the corporation charter dies
Question #20
Which of the following demographic groups is having the greatest impact on the growth of the franchising industry?
A.   baby boomers
B.   teenagers
C.   Generation X
D.   Generation Y
E.   pre-teens

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