Question 1

Government agencies offer benefits designed to help small businesses compete with larger firms.

Accepted Answer

This is true. Government agencies, such as the Small Business Administration, offer various benefits and programs to help small businesses compete with larger firms, including access to loans, counseling services, and government contracts set aside specifically for small businesses.

Question 2

Assume that a tech firm decides to invest some of its excess cash by acquiring a coffeehouse chain.This would be a _____.
A)conglomerate company
B)vertical merger
C)horizontal merger
D)joint venture

Accepted Answer

A conglomerate company is formed when a firm diversifies its business by acquiring a company in an unrelated industry, such as a tech firm acquiring a coffeehouse chain.

Question 3

Most managers of home-based businesses struggle to establish business hours that correspond with customer availability.

Accepted Answer

The answer of Most managers of home-based businesses struggle to...

Question 4

If JNK steel buys Ramirez Iron Ore to assure itself of a constant flow of ore,it will be an example of a _____.
A)conglomerate company
B)domestic company
C)vertical merger
D)subsidiary corporation

Accepted Answer

A vertical merger involves the combination of two companies that are in different stages of the production process but are part of the same supply chain. In this case, JNK steel, which is a steel manufacturing company, is acquiring Ramirez Iron Ore, which is involved in the production of iron ore. This will enable JNK to control the supply of inputs that go into the production process, thereby reducing costs and increasing efficiency.

Question 5

Small businesses are more likely to employ older workers than large businesses,but not the youngest ones.

Accepted Answer

The answer of Small businesses are more likely to employ...

Question 6

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

Accepted Answer

Latifa has the authority to make important financial decisions and authorize expenditures, which indicates that she is part of the top management team of the corporation.

Question 7

Which type of merger is done to increase customer bases?
A)Vertical merger
B)Conglomerate company
C)Joint venture
D)Horizontal merger

Accepted Answer

A horizontal merger is done between companies operating in the same industry and will lead to an increase in the customer base as both companies will have access to the other's existing customers.

Question 8

Any firm with fewer than 1,000 employees is considered a small business.

Accepted Answer

The definition of a small business varies by country and industry, but it is generally defined by the number of employees, annual receipts, or both. In many cases, a small business is one with fewer than 500 employees, according to the U.S. Small Business Administration.

Question 9

Many small-business start-ups are more competitive because of technology and online resources.

Accepted Answer

With the rise of technology and online resources, small businesses now have access to tools and platforms that allow them to compete with larger companies on a more level playing field. This includes things like online marketing, e-commerce, and cloud-based tools for accounting and data management. Additionally, many start-ups are leveraging emerging technologies like artificial intelligence and blockchain to develop innovative products and services that can disrupt traditional industries.

Question 10

The joining of two car manufacturing companies will be an example of a _____.
A)conglomerate company
B)horizontal merger
C)vertical merger
D)joint venture

Accepted Answer

A horizontal merger involves the combination of two companies operating in the same industry and at the same stage of the production process. In the case of two car manufacturing companies joining together, they would be considered competitors operating in the same market, making it a horizontal merger. A conglomerate company involves the combination of multiple companies operating in different industries. A vertical merger involves the combination of two companies in the same industry but at different stages of the production process. A joint venture involves two or more companies coming together for a specific project or purpose.

Question 11

_____ must verify in writing the accuracy of their corporation's financial statements.
A)Board members
B)Stockholders
C)Chief operating officers and chief financial officers
D)Governmental officials

Accepted Answer

The chief operating officers and chief financial officers are responsible for the preparation and accuracy of a corporation's financial statements, and they are required to verify this in writing. Board members may review and approve the financial statements, stockholders may vote on their approval, and governmental officials may require the financial statements to be filed, but they are not responsible for verifying their accuracy.

Question 12

An American retail chain started doing business in India by forming a _____ with one of India's leading business groups.
A)joint venture
B)subsidiary
C)horizontal merger
D)vertical merger

Accepted Answer

A joint venture is a strategic partnership between two or more companies to form a new entity to carry out a business activity, sharing the risks and profits. As per the given scenario, the American retail chain entered the Indian market by forming a joint venture with one of India's leading business groups, which indicates that they created a new entity together to operate in India. Therefore, option A is the correct answer. Subsidiary, horizontal merger, and vertical merger do not fit the given scenario.

Question 13

An acquisition occurs when _____.
A)one company purchases the property and assumes the obligations of another company
B)one corporation owns 8% of the stock of another corporation
C)owners of small companies band together to operate their businesses collectively
D)two or more firms combine to form a single company

Accepted Answer

An acquisition occurs when one company purchases the property and assumes the obligations of another company.

Question 14

Star Airlines' purchase of Hispania Airlines combines the resources and capabilities of both firms to create the world's largest airline.The newly formed company is an example of a _____.
A)vertical merger
B)joint venture
C)horizontal merger
D)conglomerate company

Accepted Answer

A horizontal merger is a merger between two companies that compete in the same industry or market. In this scenario, Star Airlines and Hispania Airlines both operate in the airline industry, making this a horizontal merger. A vertical merger involves companies in different stages of the same industry, a joint venture involves two or more companies collaborating on a specific project or goal, and a conglomerate company is a company that diversified into various unrelated industries.

Question 15

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

Accepted Answer

A conglomerate merger is a type of merger where two companies from different industries come together to diversify their business and generate more revenue. In this case, News 24/7, a newspaper group, and Alfalah Finance, an investment firm, are from different industries but have merged together for these reasons. Therefore, the best choice is A) conglomerate merger.

Question 16

A reason small businesses are so successful is also the reason they might fail-their founders are willing to take a risk.

Accepted Answer

Small business founders are often willing to take a risk and try something new or different, which can lead to success. However, this same willingness to take risks can also lead to failure if they make the wrong bets or take on too much debt.

Question 17

Small businesses generate over 50% of new jobs.

Accepted Answer

According to the Small Business Administration (SBA), small businesses create over 50% of new jobs in the United States.

Question 18

The vast majority of firms have fewer than 500 employees.

Accepted Answer

This statement is true according to data from the Small Business Administration, which states that 99.9% of businesses in the United States have fewer than 500 employees.

Question 19

Direct Small Business Administration (SBA)loans are available in only a few special situations,such as natural disaster recovery and energy conservation.

Accepted Answer

The SBA typically provides loan guarantees rather than direct loans, except in specific situations like disaster recovery and energy conservation where direct loans are available.

Question 20

The board of directors usually includes some individuals who are not employed by the corporation.These people are referred to as _____.
A)priority directors
B)outside directors
C)stockholders
D)members of top management

Accepted Answer

Those not employed by the corporation are referred to as outside directors. Priority directors, stockholders, and members of top management are not accurate terms to describe this group.

Quiz 5: Forms of Business Ownership and Organization

Government agencies offer benefits designed to help small businesses compete with larger firms.

Assume that a tech firm decides to invest some of its excess cash by acquiring a coffeehouse chain.This would be a _____.

Most managers of home-based businesses struggle to establish business hours that correspond with customer availability.

If JNK steel buys Ramirez Iron Ore to assure itself of a constant flow of ore,it will be an example of a _____.

Small businesses are more likely to employ older workers than large businesses,but not the youngest ones.

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.

Which type of merger is done to increase customer bases?

Any firm with fewer than 1,000 employees is considered a small business.

Many small-business start-ups are more competitive because of technology and online resources.

The joining of two car manufacturing companies will be an example of a _____.

_____ must verify in writing the accuracy of their corporation's financial statements.

An American retail chain started doing business in India by forming a _____ with one of India's leading business groups.

An acquisition occurs when _____.

Star Airlines' purchase of Hispania Airlines combines the resources and capabilities of both firms to create the world's largest airline.The newly formed company is an example of a _____.

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 _____.

A reason small businesses are so successful is also the reason they might fail-their founders are willing to take a risk.

Small businesses generate over 50% of new jobs.

The vast majority of firms have fewer than 500 employees.

Direct Small Business Administration (SBA)loans are available in only a few special situations,such as natural disaster recovery and energy conservation.

The board of directors usually includes some individuals who are not employed by the corporation.These people are referred to as _____.