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Download Business Environment and Concepts Solution

Download Business Environment and Concepts Solution

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BUSINESS ENVIRONMENT AND CONCEPTSSection 1: Business Structure1) The uniform law, issued in 1984 by the Committee on Corporate Laws of the American Bar  Association, that regulates the formation, operation, and termination of corporations is A.The Model Business Corporation ActB.The Uniform Commercial CodeC.The Revised Model Business Commercial CodeD.The Standard Incorporation Act2) Which of the following statements is true? A.The exchange of stock for services rendered is not a taxable transaction.B.The repeal of Sec. 351 would result in more existing businesses being incorporated.C.Section 351 was enacted to allow taxpayers to incorporate without incurring adverse tax consequences.D.Section 351 is an example of a negative aspect of the corporate form of business organization.
 
3) Which of the following statements is true? A.Formation of a partnership requires legal documentation.B. An individual engaged in the active conduct of a business must elect not to be taxed as a partnership.C.If two people (or business entities) work together to carry on any business or financial operation with theintention of making a profit and sharing that profit as co-owners, a partnership exists for federal incometax purposes.D.The partnership form of business creates double-taxation because individual partners are taxed, and thepartnership is also taxed as a separate legal entity.BUSINESS ENVIRONMENT AND CONCEPTS
Section 2: Economic Concepts Essential to Obtaining an Understanding of an Entity’s Business and
Industry4) What effect would a decrease in interest rates by the
Federal Reserve most likely have in the nation’s
manufacturing sector, all other factors remaining constant? A. An increase in both production and employmentB. A decrease in both production and employmentC. An increase in production but a decrease in employmentD. A decrease in production, but an increase in employment5) A table that shows the relationship between the price of a good and the quantity demanded of thatgood is called A.a price-quantity tableB.a complementary tableC.a demand scheduleD.an equilibrium schedule6) If policymakers increase aggregate demand, the price level A.falls, but unemployment risesB.and unemployment fallC.and unemployment riseD.rises, but unemployment falls
 
BUSINESS ENVIRONMENT AND CONCEPTSSection 3: Financial Management7) Which table would show the largest factor for an interest rate of 8% for five periods? A.Future value of an ordinary annuity of 1B.Present value of an ordinary annuity of 1C.Future value of an annuity due of 1D.Present value of an annuity due of 18) Financial service A.is concerned with the duties of the financial manager B.involves the design and delivery of advice and financial productsC.provides guidelines for the efficient operation of the businessD.handles accounting activities related to data processing9) As the interest rate increases for any given period, the future value interest factor will A.decreaseB.increaseC.remain unchangedD.move toward 110) The specific cost of each source of long-term financing is based on ________ and ________ costs. A.before-tax; historicalB.after-tax; historicalC.before-tax; book valueD.after-tax; current11) At the operating break-even point, ________ equals zero. A.sales revenueB.fixed operating costsC.variable operating costs

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