ETH 321T Week 3 Assignment 2

ETH 321T Week 3 Assignment 2 | University of Phoenix | Assignment Help 

1.            Lenny organized his business in Delaware. He has customers in Delaware, other states in the U.S., and in foreign countries. Lenny’s business is __________ in Delaware.

o             Domestic

o             Closely-held

o             Alien

o             Professional

o             Subchapter S

2.            Hal and Miranda have a general partnership business for landscaping projects. Hal makes a contract with a customer for a project one day while Miranda is absent and leaves on vacation the next day. Miranda does not feel she has the time to perform the contract for the customer. Which of the following is true?

o             Miranda may relinquish her obligation to perform the contract since Hal signed it without her knowledge.

o             Miranda is obligated to perform the contract.

o             Only Hal is obligated to perform the contract.

3.            Kara wants to build a business. She has plenty of capital and potential investors and partners. She wants to avoid the burden of sole liability for her business and wants to be able to close the business when she is no longer interested in it. Which of the following would lead Kara to choose a sole proprietorship organization for her business?

o             Ability to close the business easily

o             Plenty of capital

o             Many potential investors/partners

o             Avoidance of sole liability

4.            Loptech, a technology firm, wants to issue bonds for investment purposes. Loptech has one of the best credit ratings in the industry. Market rates for debt instruments average at .5% interest. Based on its credit rating, Loptech would likely sell bonds that pay _____.

o             0.25%

o             0.75%

o             Indeterminable with current information

o             0.5%

As the text states, firms with higher credit may issue lower-rate bonds. Loptech’s spectacular credit would most likely give it the ability to issue bonds that pay less than the market average.

5.            What is the appropriate description for a plant-processing franchise?

o             A franchisee produces and sells a franchisor’s product using the franchisor’s name.

o             A franchisee sells a franchisor’s product in a specific geographic area.

o             A franchisee focuses on making a franchisor’s product using the franchisor's manufacturing method or recipe.

6.            Which of the following roles best fits the situation?

Apol wants to start or join a business but is not sure which business organization would be best. She has a large amount of capital but does not yet have any partners who can invest in or effectively manage the business.

o             Neither a limited or general partner would be a good choice.

o             General partner in a limited partnership.

o             Limited partner in a limited partnership.

7.            Noodleoo, a struggling restaurant chain, wants to enact a franchise agreement with Stephen to sell its product through a chain-style franchise. Stephen agrees and opens the store, and 6 months later Noodleoo goes bankrupt. Which is most likely true of this situation?

o             Stephen was not responsible for looking into the financial status of Noodleoo before making the agreement.

o             The Franchise rule does not apply to struggling companies.

o             If Noodleoo was not transparent with its financial data, Stephen has no recourse.

o             If Noodleoo was not transparent with its financial data, it has broken the Franchise Rule.

8.            Mario and Johnny want to start a business. They have very little capital. They are new partners and largely unfamiliar with each other’s management practices. They are happy, however, to be organizing a business together in order to avoid full liability for the business. Which detail of this situation is a good reason for Mario and Johnny to create a general partnership?

o             Little capital

o             Sharing profits

o             Unfamiliar with each other’s management practices

o             Avoiding full liability

9.            Piper is a manager in a corporation that was organized in Canada by one of his former coworkers. The company provides consulting services and training for architects employed by construction companies. The company recently went public, with shares being sold to hundreds of investors. Piper’s company would be a __________ corporation.

o             Closely-held

o             Professional

o             Subchapter S

10.          Rita wants to be involved in business. She has a fair amount of money to invest, but she does not want to be involved in management. She wants to form a business in the quickest way possible under her circumstances. Which form of business would be best for Rita?

o             Corporation

o             Sole proprietorship

o             Limited partnership

o             LLC

As creations of state statute, corporations are more complex and difficult to form. A sole proprietorship is quick to form, but of course this would force Rita into a management position.

11.          Sandy works for RigorMart. She supervises regional managers and directs them based on orders from the board of directors. Sandy’s position also entitles her to stock ownership in the company. What is Sandy’s position in the company?

o             Executive and shareholder

o             Executive

o             Shareholder

o             Executive, shareholder, and director

12.          Abigail is a manager at her company. The company just launched an initiative to improve its corporate citizenship practices. Abigail is responsible for all but which of the following areas?

o             Safeguarding shareholders' interests

o             Vigilance of the board of directors

o             Disclosure and transparency

o             Integrity and ethical behavior

13.          Hal organized his business in Canada. Most of his customers are in Montana. In Montana, Hal’s business would be considered a(n) __________ corporation.

o             Subchapter S

o             Closely-held

o             Professional

o             Domestic

o             Alien

14.          Koffman Corporation is trying to raise capital. What method would be the least risky to raise capital if it has a less-than-favorable credit rating?

o             Bond issuance, since nobody wants to buy shares of a company with a less-than-perfect credit rating.

o             Bond issuance, since additional debt can provide the company with more leverage.

o             Stock issuance, since a credit rating won’t negatively affect Koffman’s ability to sell stock.

o             With low credit, Koffman doesn't have any options for raising capital.

15.          What is the correct order of events for the formation of a corporation?

o             Business selects a state of incorporation; Novations are executed; Incorporators select a name for the corporation; Articles of incorporation are filed

o             Business selects a state of incorporation; Incorporators select a name for the corporation; Articles of incorporation are filed; Novations are executed

o             Incorporators select a name for the corporation; Articles of incorporation are filed; Business selects a state of incorporation; Novations are executed

o             Novations are executed; Articles of incorporation are filed; Incorporators select a name for the corporation; Business selects a state of incorporation

16.          Cadence works for WilderCorp. She meets with a team to make all-encompassing decisions concerning the direction of the business. She also personally supervises managers and conducts training for supervisors and plant managers. Cadence also buys stock in WilderCorp. What is Cadence’s position in the company?

o             Director

o             More than one option

o             Executive

o             Shareholder

17.          What role best fits the following situation?

Manny wants to be involved in a business but is not sure which type of business to join or create. He has capital to invest. He has a good network of potential investors and partners. He has no experience in management.

o             Neither a limited or general partner would be a good choice.

o             Limited partner in a limited partnership.

o             General partner in a limited partnership.

18.          Zoey is the CEO of a corporation she organized herself, and the corporation has 15 shareholders. The company operates in several states, as well as outside of the U.S. Her business consists mostly of training services for in-home medical care personnel. Her company would be a __________ corporation.

o             Closely-held

o             Professional

o             Subchapter S

19.          Lily wants to build a business. She has very little capital. She does, however, have a partner with which she could run a business. Lily wants to be able to avoid being held personally liable for any problems the business has. Which of the following would lead Lily to choose a sole proprietorship organization for her business?

o             Possession of a partner

o             Little capital

o             None of the above

o             Avoidance of personal liability

20.          What is the appropriate description for a distributorship?

o             A franchisee sells a franchisor’s product in a specific geographic area.

o             A franchisee produces and sells a franchisor’s product using the franchisor’s name.

o             A franchisee makes or sells a franchisor’s product.