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Exam 6: Forms of Business Ownership

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Question 81

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When two companies in the same industry combine,the result is called a:

A) vertical merger
B) joint venture.
C) monopoly.
D) horizontal merger.

E) A) and D)
F) C) and D)

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Question 82

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In a general partnership,all active partners are entitled to an equal share of the firm's profits.

A) True
B) False

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Question 83

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Maria is already a successful franchisee with Nite Lite,a chain of "no frills" motels that provide clean rooms and good service at affordable rates.The motel she currently operates is located in the Maritime provinces,but she is considering an opportunity to open another Nite Lite motel in the United States.Although her costs of operating in a new country may be higher,she will offer the benefits of convenience and a predictable level of service.

The franchisee often must pay the franchisor a share of profits or a percentage commission on sales known as a royalty.

When a firm is taken private,its stock is:

When entering into a new partnership,the partners should:

In the past,the ABC's Markets and XYZ's Groceries have been fierce competitors in the grocery market.However,they recently issued a joint announcement stating their decision to merge.The announcement justified the proposed merger by claiming that the resulting firm would have more financial resources,which would enable it to expand services and broaden offerings to consumers.This proposed merger is an example of a horizontal merger.

Jocelyn belongs to food a co-operative in her community.As a member,she can expect to have a vote in the election of the co-operative's board of directors.

Excursion Corporation recently bought out Suburban Engineering for an undisclosed amount of money.It now owns all of Suburban's properties and obligations.This is an example of a(n) :

Taking a firm private involves converting a firm from a corporation into a general partnership.

Franchisors will sometimes send reverse royalties to franchisees who:

One of the major reasons for the wave of mergers in the last decade was the desire of firms to expand within their own markets to save on costs.

Which of the following statements about co-operatives is most accurate?

Stockholders in a corporation have limited liability for the debts of the corporation.

The three major types of corporate mergers are known as:

A(n) _________ occurs when one company buys the property and obligations of another company.

An owner of a corporation is known as a:

Franchising has certainly become a key component of the Canadian economy.What do you see as the major advantages and disadvantages of franchising?

In a general partnership,all owners share in both management of the business and in the assumption of liability for the firm's debts.

In a co-operative,members/customers: