Suppose Your University Decides to Increase Parking Fees in Order

question 46

Multiple Choice

Suppose your university decides to increase parking fees in order to deal with the shortage of parking spaces.Nevertheless, the president of your student body convinces the university to pay back the amount spent on higher parking fees to students in the form of a rebate at the end of the school year.Therefore, the increase in parking fees will:

• A)NOT solve the parking shortage
• B)Reduce demand for parking and hence alleviate the parking shortage
• C)Will have no effect since it will be offset entirely by the rebate
• D)Make the parking shortage even worse

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Definitions:

Stated Value

The nominal value assigned to no-par value stock by the company's board of directors, used for accounting purposes.

Legal Capital

The minimum amount of capital that a company is required to maintain as per law, to protect creditors and ensure that the company remains solvent.

Corporate Form

A legal structure of a business organization that is recognized as a separate legal entity, often characterized by limited liability for its owners and issuance of stocks.

Sole Proprietorship

A business structure where a single individual both owns and runs the company, often leading to simpler administrative requirements but unlimited personal liability.