Which of the Following Statements About a Not-For-Profit Firm's Ownership

question 4

Multiple Choice

Which of the following statements about a not-for-profit firm's ownership is most correct?

• A) The residual earnings (profits) of not-for-profit firms can be distributed to the firm's top managers.
• B) Not-for-profit firms are exempt from federal taxes, but they must pay state and local taxes, including property taxes.
• C) Upon liquidation of a not-for-profit firm, the proceeds from the sale of its assets are distributed, on a pro rata basis, to the firm's employees.
• D) None of the profits are used for private inurement.
• E) Not-for-profit firms are governed by a board of trustees whose members are elected by the community at large.

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Definitions:

Carbon Dioxide

A colorless, odorless gas produced by burning carbon and organic compounds and by respiration. It is naturally present in air and is absorbed by plants in photosynthesis.

Economic Principle

Fundamental concepts or theories that underpin the study and understanding of economics, guiding analysis of economic behavior and decision making.

Federal Government

The national government of a federated state, which holds the authority to govern at a national level.

Opportunity Cost

The value of the best alternative foregone in making any decision.