[Solved] Which of the Following Is an Advantage of Limited Liability

Beany Corp. and Kaffe Inc.are leading producers and distributors of coffee beans and have joined together to become the world's largest distributor of coffee. This is an example of a(n)_____. A)vertical merger B)horizontal merger C)conglomerate merger D)upward merger

In a carve-out, a firm: A)distributes the stock of its new company to existing shareholders. B)distributes the stock of its new company to outside investors. C)purchases a company in a new industry and sells its shares to existing shareholders. D)purchases a company in a new industry and sells its shares to outside investors.

The nature of work and the work schedule in the animation department of a movie production company differ from that of other departments of the company. Hence, the company decides to branch this department out into a new company by selling the stock to outside investors. In this scenario, the company is using a strategy called a(n): A)conglomerate merger. B)acquisition. C)carve-out. D)telecommuting.

Red Tide Inc., an electronics manufacturer, merges with Dew Corp., a food brand, to make the firms less susceptible to unfavorable market conditions in any single market. This is an example of a _____ merger. A)horizontal B)vertical C)conglomerate D)macro

Which of the following is a characteristic of limited liability companies (LLCs)? A)They are made to pay an annual franchise tax in many states. B)They are subject to double taxation. C)They are required to hold timely board meetings. D)They are required to produce a larger amount of paperwork than corporations.

A _____ is a type of franchising arrangement in which the franchisor makes a product and licenses the franchisee to sell it. A)business format franchise B)conglomerate merger C)distributorship D)divestiture

Cella, a clothing manufacturer, has licensed Crux Corp. to market and sell its products. This is an example of a _____. A)divestiture B)distributorship C)conglomerate merger D)spin-off

Which of the following best describes a business format franchise? A)It is a broad franchise agreement in which a franchisee pays for the right to use the name, trademark, and production methods of a franchisor. B)It is a type of franchising arrangement in which a franchisor makes a product and licenses a franchisee to sell it. C)It is a type of franchising arrangement in which a franchisor shares ownership with a franchisee by selling a number of its shares. D)It is a broad franchising agreement in which a franchisee pays a franchisor for the right to use the production methods of the franchisor and functions under a different name and identity.

A Franchise Disclosure Document: A)contains information about every aspect of the franchise agreement. B)is a monthly document compiled by a franchisee providing information about its sales and profits. C)extensively uses legal jargon to explain the procedures and rules of the franchisor to the franchisee. D)is a document sent to the franchisor by the franchisee indicating that the franchisee will no longer sell products under the franchisor's name.

Which of the following is a disadvantage of franchising? A)The franchisee seldom receives any support or training from the franchisor about running the business. B)The franchisee faces the task of establishing brand recognition among customers. C)The franchisee has no flexibility as it is required to follow the franchisor's procedures to the letter. D)The franchisee faces funding challenges as bankers are often reluctant to fund franchisees.