Which of the Following Could Explain Why a Business Might

question 54

Multiple Choice

Which of the following could explain why a business might choose to operate as a corporation rather than as a sole proprietorship or a partnership?

• A) Corporations generally face fewer regulations.
• B) Less of a corporation's income is generally subject to federal taxes.
• C) Corporate shareholders are exposed to unlimited liability, but this factor is offset by the tax advantages of incorporation.
• D) Corporate investors are exposed to unlimited liability.
• E) Corporations generally find it easier to raise large amounts of capital.

Learn to calculate variance of financial instruments.

Identify and understand the criteria for evaluating capital investments.

Understand the process of decision-making under uncertainty.

Learn to calculate and interpret the return to risk ratio.

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Definitions:

Civil Trial

A legal process through which private disputes that involve claims of civil wrongs are resolved in court, without involvement of criminal sanctions.

Subpoenas

Legal documents that order an individual or organization to appear in court or produce evidence or information in a legal case.

Electronic Media

Media that utilize electronics or electromechanical energy for the end-user to access the content, such as radio, television, and the internet.

Real-Time Court Reporting

The practice of providing immediate transcription of court proceedings, depositions, and other legal proceedings as they occur.