In order to establish a C corporation, it is a requirement that investors run thecompany, whereas in an S corporation, this is not the case.True or FalseTrueFalse

There are a number of reasons responsible for incorporating a business. Corporation is one of the…

Answered: In order to establish a C corporation,…

Understanding Business

12th Edition

ISBN:9781259929434

Author:William Nickels

Publisher:William Nickels

Chapter1: Taking Risks And Making Profits Within The Dynamic Business Environment

Section: Chapter Questions

Problem 1CE

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uestion The company's bank won't lend it any more money than it already has, and investment bankers have said that debentures are out of the question. The treasurer has asked you to do some research and suggest a few ways in which bonds might be made attractive enough to allow the company to borrow. Explain how to secure the bonds with owned assets in great detial. In what ways does it make the bonds more attractive to allow the company to borrow?
The major difference between realizing a capital loss or a business investment loss is the sale of shares or write-off of debts of a Small Business Corporation. True False
ANSWER 13.25 A AND B ONLY
Which of the following is least likely a violation of Standard VI(B), Priority of Transactions? A Portfolio Manager: A) trades for her own account before her firm announces a change in a recommendation. B) trades for her son's trust account, which is not a firm account, on the day after her firm changes its buy/sell recommendation. C) takes a position for her own outside account in a stock one week after she published a buy recommendation for the stock.
The final stage of a new business venture is maturity. True False
Consider two equity market investors. The first investor is a hedge fund manager that relies on very active trading, and borrows from investment banks in order to leverage their investment. Their remuneration depends on total base fee earned by their fund as a percentage of net assets under management, plus a yearly bonus based on returns generated above a hurdle rate. The second investor is a high net-worth individual who is investing for their own retirement, which they anticipate to occur in 10 years or more. Identify three dimensions of risk that are likely to have significantly different impact on thesetwo investors. Explain the nature of the difference. Suggest aspects that each investor might monitor in order to control the risks most relevant to them.
Gowns a Business Overhead Expense policy with a monthly benefit of $5,000. G pays an annual premium on January 1. On June 1 of the same year, G sells the later, G becomes disabled as the result of a fall. In this situation, which of the following monthly benefits, will Greceive? O A OC D. $10,000 $5,000 $2,500 $0
Assume “Jane” saves $10,000 per year for 10 years starting at age 25. At age 35 she no longer is able to save but leaves her accumulated savings invested until age 65 when she retires. Assume “John” does not begin saving until age 35, but then saves $10,000 per year until age 65 when he also retires. Assume John and Jane invest their entire wealth in the same mutual fund. Who accumulates a larger retirement nest egg? 1. Answer this question by building an Excel spreadsheet that allows you to show the difference in wealth at age 65 assuming an annual rate of return of 8%. Make sure your model allows you to change the assumed rate of return and automatically recalculate the difference in wealth at age 65. 2. At what assumed rate of return are John and Jane’s wealth at age 65 equal? Use “Goal Seek” in order to find this rate of return. 3. Create a graph to clearly show how final wealth for John and Jane depends on the rate of return. Start at 0% and increase the rate of return in…
If a firm’s sales revenues exceed its expenses, the firm has earned a profit.True or False
Undercapitalization refers to the problem of insufficient start-up funds. True or False True False
The usual face value for most corporate bonds is $5,000.; True or False
Consider Bruno who manages an underwriting team in an insurance firm. Recently, the management of Bruno’s firm informed him of their decision to create a new risk assessment team, consisting of data scientists with machine learning expertise, and reduce the size of Bruno’s underwriting team. Bruno’s underwriting team will now work with the new risk assessment team in order to determine whether to provide insurance to applicants. Graphically illustrate the impact of the management’s restructuring decision on the firm’s production function. Your diagram should have the amount of human intelligence on the horizontal axis and the number of decisions on whether to provide insurance on the vertical axis. Fully label your diagram. Note that there are no actual numbers given in this question: you may make them up or simply use appropriate notations. Briefly explain the key information of your diagram.

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In order to establish a C corporation, it is a requirement that investors run the company, whereas in an S corporation, this is not the case. True or False True False