Which of the following statements is CORRECT?
A. Corporations generally are subject to more favorable tax treatment and fewer regulations than partnerships and sole proprietorships, which is why corporations do most of the business in the United States.
B. Managers who face the threat of hostile takeovers are less likely to pursue policies that maximize shareholder value than are managers who do not face the threat of hostile takeovers.
C. One advantage of the corporate form of organization is that liability of the owners of the firm is limited to their investment in the firm.
D. Because of their simplified organization, it is easier for sole proprietorships and partnerships to raise large amounts of outside capital than it is for corporations.
E. Bond covenants are an effective way to resolve conflicts between shareholders and managers.
Answer: C
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Explain why a three way match may not be required for transactions covered by a trading partner agreement
Ponte Corporation owns 25 percent of the voting shares of Scala Corporation. In 20X8, Scala reported net income of $120,000 and paid dividends of $30,000. Ponte uses the equity method to account for this investment. Ponte reported taxable income of $160,000 on its separate operations and has an effective tax rate of 40 percent. There is an 80 percent exemption on intercompany dividends.Based on the preceding information, income tax expense for Ponte for the year 20X8 will be:
A. $64,000 B. $64,600 C. $67,000 D. $66,400
An Enterprise Resource Planning (ERP) System can best be described as:
A. a collection of programs that use a variety of unconnected databases. B. a database that is primarily used by a purchasing department to determine the correct amount of a particular supply item to purchase. C. a sophisticated means of linking two or more companies to facilitate their planning processes. D. a single database that collects data and feeds it into applications that support each of the company's business activities, such as purchases, production, distribution, and sales.
________ analyze the business situation and identify the need for information and information services to meet the problems or opportunities of the business
A) Programmers B) Users C) Systems analysts D) Database analysts