Lackawanna BUS105 2021 April Module 3 Quiz Latest

BUS105 Introduction to Business

Module 3 Quiz  

Question 1Hans is considering forming a company that specializes in international consultations. He wants to serve as a liaison between domestic and Chinese toy distributors, offering the U.S. firms access to lower cost labor and offering the Chinese firms access to one of the largest markets in the world. In addition, he will need to capitalize the operation by offering shares of common stock. Which business entity should he choose?

  an LLC

 a corporation

 an LLP

 a sole proprietorship

 Question 2Good friends, Bernie Samples and Susan Randle each studied accounting in college. Recently they decided to work together as co-owners of a small accounting firm. This is an example of

  corporation.

 limited liability corporation.

 sole proprietorship.

 partnership.

 Question 3Susan Boyle is the owner of a piano tuning business. As a sole proprietor, any profit she earns is treated as personal income of Susan Boyle.

 tax free.

 taxed twice, once as a business and then taxed again as Susan Boyle’s income.

 taxed only when she withdraws the money from a bank.

 Question 4Samantha has a talent for making attractive but inexpensive jewelry and wants to set up a small business to sell some of her creations. She asks for your advice about setting up her firm, telling you that she wants to start her business as quickly and inexpensively as possible. In addition, she doesn’t want to share control (or profits) with anyone else. Which form of business ownership would you suggest for Samantha?

 C corporation

 general partnership

 limited liability company (LLC)

 sole proprietorship

 Question 5Suzanne Limley was just elected to the board of directors at United Bank Corporation. As a board member, she is expected to represent the interests of

shareholders.

 senior bank management.

 customers.

 creditors.

 Question 6Tim, Bob, and Sal want to start a business to rehab homes. Each wants to take an active role in managing their company while also protecting their personal assets from unlimited liability. They are likely to find that forming a _____ will meet their needs.

limited liability company

 general partnership

 nonprofit corporation

 limited partnership

 Question 7Jane wants to start up a sandwich shop in Oklahoma City as a badly needed career change, after having spent seventeen years as a deckhand in a Tuna fleet based out of Guam. She doesn’t have enough money to get started, so she’ll have to borrow most of what she’ll need. What should she do?

 Jane should attend culinary school before attempting to start this business—what if she fails?

 She might do better buying her own Tuna boat and sticking with what she knows.

 Think up a creative name for the new business, form a corporation, sell stock shares to raise the needed capital, and launch.

 She should buy a Subway franchise. Though it will be expensive up front, it is more than likely that the added clout of the franchise will provide the loan officer at the bank with the necessary comfort in order to sign off on the loan.

 Question 8Kale wants to open up a new franchise. He wants to stake out a sector of Idaho for his business selling auto parts B2B to the repair shops in the area. As it grows, he wants to expand his territory accordingly. Why is a franchise maybe NOT the best idea for Kale?

Some franchise agreements may limit him to a specific territory. If he wishes to expand at some future date it may cost him more than it’s worth.

 Kale could save a lot of money by concentrating on directly importing one type of part from China for all makes and models. As a specialist with a narrow focus, he gets to keep more of what he earns, rather than paying outrageous franchise fees.

 Kale’s FDD requires him to sell parts even if he doesn’t believe in their quality.

 The auto parts business is cutthroat, and his franchise needs to have a guarantee on the box—if there’s no guarantee, people just won’t buy.

 Question 9Successful franchisors are particularly vigilant in avoiding the _____, a situation where the behavior of an incompetent or irresponsible franchisee harms the reputation of the franchisor and other franchisees.

 saturated effect

 restructuring effect

 negative halo effect

 pie-in-the-sky effect

  Question 10Walmart, ExxonMobil, Intel, and virtually all other large companies in the U.S. are organized as

 limited partnerships.

 C corporations.

 limited liability companies.

 general partnerships.

 Question 11Jacob currently works as a manager at a major corporation but has been thinking about quitting to start his own business. Which of the following reasons would most likely explain Jacob’s interest in making this major career change?

He doesn’t like the risk associated with working in the corporate environment.

He wants more benefits and a steadier income.

 He wants a job with fewer responsibilities.

 He wants to have more independence and flexibility than his corporate position allows.

 Question 12 When a large company like Ford Motor Company or Citigroup downsizes, some of the middle-aged and older workers who are laid off find it tough to find another job in corporate America. Such workers often decide to start their own businesses. They are best described as

intrapreneurs.

 micropreneurs.

 necessity entrepreneurs.

 welfare recipients.

 Question 13Greg has developed an automobile engine that runs efficiently for up to three hours on a single russet potato. His friends have pointed out how difficult it will be to get car manufacturers to adopt his new technology and that it could take years to get enough service stations to stock potatoes to make it practical for people to rely on the new energy source for long trips. However, Greg is convinced he can make the U.S. economy energy independent, thus changing the world. He plans to create a new business called Spuds-to-Go to promote his new engine. Greg has

vision.

 an external locus of control.

opportunity sense.

 strong strategic planning skills.

 Question 14Identify the entrepreneur.

Jackson launched his business in the residential construction industry in 2006, but lost everything in 2007 when the market popped. As he regroups, he formulates a philosophy that failure is a beginning for him, and not an end. As he clears away the rubble of his disaster, he begins to build a new enterprise.

 Jewel launched into the film business by crafting a successful independent film. Unfortunately for her, revenues were not sufficient for her to pay off her hefty equipment and travel debts. As she files for bankruptcy, she reads the classifieds and vows, “never again.”

 

Basil’s great grandfather left him a considerable inheritance, which is managed by several hundred different men at different agencies, including a philanthropic institution that provides venture capital to startup companies. Basil lives quite comfortably and can be heard to say, “Thanks very much, Grandfather.”

 Mike’s Metronome Manufacturing, LLC has specialized in timekeeping devices for musicians for several decades. Mike passed away and left the operation to his sons. They in turn run it competently, but it gradually loses market share because its product line is no longer innovative since Mike died.

 Question 15Qondile has a game-changer of an idea for electric power generation that will make solar, wind, nuclear, and petroleum totally obsolete as soon as it hits the market. The problem is, he needs money. He wants to retain control of the operation, given its potential. What should he do?

find an angel investor

 license the technology

 work with a venture capitalist

 leverage his personal assets by getting a second mortgage on his house

 Question 16Pop Goes the Weasel is a small toy store that competes effectively with much larger companies, since it focuses exclusively on selling nonelectronic toys made of wood. The company has been successful since it has

exploited a market niche.

 received grants from the Small Business Administration.

 worked to undercut larger competitors’ prices.

 developed a human resource systems that has attracted excellent employees.

 Question 17Dana is thinking about starting her own graphics design business but is keenly aware of the fact that she lacks much business experience. A friend suggested that she consider going to work for a successful graphics design firm before going out on her own. This advice is

almost always an excellent idea. Most studies suggest that the vast majority of successful small business owners worked for at least 10 years for someone else before they launched their own company.

a bad idea. Working for someone else tends to stifle creativity.

 a good idea, because it allows you to learn the ins and outs of running that type of business with little personal risk. Keep in mind that if you work for someone else too long, you might get too comfortable in your position to follow through with your plans.

 sometimes a good idea, but more often it’s a waste of time. Most small businesses are so simple to manage that prior experience isn’t really necessary.

 Question 18Sheila loves taking care of animals and has thought about starting her own pet grooming business. However, she doesn’t know much about the growth potential for this type of business or the amount of competition she would face. She also wants to find out if there are any government regulations she would need to follow. A good starting point to help her find answers to her questions is to contact the

   Federal Trade Commission.

 Small Business Administration.

 American Association of Entrepreneurs.

local chapter of the federal government’s Entrepreneurial Advisory Board.

 Question 19A(n) _____ is a formal document that describes a business concept and outlines the core business objectives while detailing the strategies and timelines for achieving those objectives.

enterprise mission statement

business plan

strategic business outline

 enterprise focus document

 Question 20Senator Taxmoore wants to help revitalize inner cities and stimulate more innovation. He could achieve both of these goals by supporting legislation that would

increase government benefits for those that are unemployed.

 call for greater government ownership of factories located in inner cities.

 make it illegal for firms to outsource jobs.

encourage the formation of small businesses.