[Language-Science Kits] the President of Kool Science, Inc

question 32

Multiple Choice

[Language-Science Kits] The president of Kool Science, Inc., which makes educational science kits for children, calls the president of Language Fun, Inc., which makes foreign language learning materials for children. They discuss production of three educational toys which teach both science and foreign language to children. They agree that Kool will work with Language to create and market the three toys, and that they will use Kool's manufacturer to produce the product.
-What type of business organization is best suited for the situation of Kool Science and Language Fun?

• A) Cooperative.
• B) Joint Venture.
• C) Business Trust
• D) General partnership
• E) Corporation

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Definitions:

Internal Growth Rate

The maximum rate at which a company can expand using only internal financing sources, without external financing.

Dividend Payout Ratio

The fraction of net earnings a firm pays to its shareholders as dividends, expressed as a percentage of the company's total earnings.

Retention Ratio

The proportion of net income that is retained by a company rather than distributed to its shareholders as dividends, indicating how much profit is reinvested.

Net Income

The amount of money remaining after all operating expenses, taxes, and interest have been deducted from total revenue.