Which of the Following Statements Is Correct

question 82

Multiple Choice

Which of the following statements is correct?

• A) Other things held constant,it generally is safer to invest money in a proprietorship than in a partnership or a corporation.
• B) According to the text,law firms and accounting firms must be organized as proprietorships or partnerships;these businesses do not have the option of incorporating.
• 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 can minimize federal income taxes by setting up the business as a corporation.
• D) According to the text,"agency problems" tend to increase as the percentage of a corporation's stock owned by its managers increases.
• E) Maximizing the income statement item "net income" is not the best goal for a corporation whose managers are interested in maximizing the economic welfare of the firm's stockholders.

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Definitions:

Bicyclic Alkane

A type of organic compound that contains two rings, which are made entirely of carbon and hydrogen atoms, sharing one or more common carbon atoms.

Carbon Atoms

The basic building blocks of organic molecules, capable of forming a vast array of compounds due to its four valence electrons.

Hydrogen Atoms

The simplest type of atom, consisting of one proton in the nucleus and one electron orbiting the nucleus.

Straight-Chain Alkanes

Hydrocarbons containing only single bonds in a continuous chain without any branches.