1. American Business Machines is organized as a corporation. Its income will be taxed first at the corporate level and also on shareholder tax returns as dividends. This situation is known as

A.a tender offer.

B.double taxation.

C.regulatory costs.

D.limited liability.

E.acquisition.

2.Under the concept of _______, a sole proprietor is personally responsible for all debts generated by a business.

A.limited liability

B.employment at will

C.unlimited liability

D.stare decisis

E.privity

3.Casino Systems and the Hamilton Race Track have collaborated to develop software for sale to other racetracks. Cisco and Hamilton are most likely involved in a

A.professional corporation.

B.transnational corporation.

C.vertical merger.

D.limited partnership.

E.strategic alliance.

4.A(n) __________ invests money in a partnership, but is liable only to the extent of his/her investment.

A.agent

B.general partner

C.limited partner

D.officer

E.sole proprietor

5.When a firm sells part of itself in order to raise capital, it is referred to as a(n)

A.ESOP.

B.divestiture.

C.friendly takeover.

D.spin-off.

E.merger.

6.Which of the following is a common source of funding for a small business?

A.family and friends

B.personal savings

C.lending institutions

D.governmental agencies

E.all of the above

7.A _________________ is independently owned and managed and does not dominate its market.

A.corporation

B.sole proprietorship

C.small business

D.partnership

E.cooperative

8.Small business consultants often recommend ____________ because the odds of success are better.

A.external financing

B.starting the business from scratch

C.buying an existing business

D.investing overseas

E. none of the above