Which of the Following Statements Is Correct

question 15

Multiple Choice

Which of the following statements is correct?

• A)Other things held constant, it is generally safer to invest money in a proprietorship than in a corporation.
• B)There really is no difference between a general partnership and a corporation, because both have multiple owners and both offer limited liability to the owners.
• C)If you are planning to start a business, which you will run as the sole employee, and if you expect the business to earn $1,000,000 per year before taxes, you always can minimize the total taxes you pay by setting up the business as a corporation.
• D)According to the text, "agency problems" tend to increase when managers own larger relative amounts of the company's stock.
• E)Maximizing the income statement item "net income" might not be the best goal for a corporation if the managers are interested in maximizing the economic welfare of the firm's stockholders (that is, the firm's stock price).

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Definitions:

Adequate Intake

The amount of a nutrient that is believed to ensure nutritional adequacy, used when a recommended dietary allowance cannot be determined.

Food Guide Pyramid

A visual representation designed to guide healthy eating habits by illustrating the recommended portions of various food groups.

Nasogastric Tube

A medical tube that is inserted through the nose down into the stomach, used for feeding, medication administration, or gastric decompression.

Xiphoid Process

A small cartilaginous extension of the lower part of the sternum, which can be felt as a small bump on the chest.