Compare and contrast sole proprietorships and general partnerships
What will be an ideal response?
Answer: A sole proprietorship has only one owner and the owner has complete control over the business. A general partnership must have at least two owners. Each partner is entitled to equal control unless agreement specifies otherwise. Profits are taxed at individual levels in both structures. The owner is responsible for only his mistakes and he has unlimited liability in a sole proprietorship. In a partnership, all partners have unlimited liability. This means that their personal assets are at risk to mistakes made by other partners.
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Unlike other methods of inventory management, logistics _____
a. is concerned with the flow of information via paperless means b. regards order processing, transportation, warehousing, customer service, and inventory management as interdependent c. seeks to minimize inventory accumulations in the whole channel system d. seeks to trade off the lower inventory levels with lower levels of customer service
What type of evidence, often gathering during discovery, includes writings such as
reports, business records, and correspondence? a. Actual evidence b. Documentary evidence c. Demonstrative evidence d. Real evidence
When a company purchases a depreciable asset, it must estimate the asset's useful life and salvage value.
Answer the following statement true (T) or false (F)
One principal-agent conflict is that between a firm's creditors (as a principal) and its shareholders (as agent). For example, after issuing risky debt, stockholders have an incentive to increase the riskiness of the firm's assets (e.g
, by changing operating strategy), which would tend to expropriate wealth from creditors to stockholders. Which of the assumptions of an ideal capital market is violated in this example? a. Capital Markets are frictionless b. Homogeneous expectations c. Atomistic competition d. The firm has a fixed investment program e. Once chosen, the firm's financing is fixed