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Practice Test 1- Fall 2011

Practice Test 1- Fall 2011 - 1 Since the beginning of the...

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1. Since the beginning of the 1900s, the agricultural sector of the United States has: A. Seen the number of family farms more than double. B. Become less and less competitive in the global economy. C. Produced a consistent output per farm. D. Experienced a significant drop in employment, mainly because of tremendous improvements in efficiency. 2 . Javier is the sole proprietor of a golf shop. Because he is a sole proprietor, any profit Javier's business earns is: A. Totally tax-free. B. Taxed only as Javier's personal income. C. Taxed twice, once as business income, then again as Elroy's personal income. D. Taxed only if and when it is distributed to investors. 3 . Joe Jackson operates a sole proprietorship, but he is in poor health and may be unable to continue running the business. If Joe becomes incapacitated, his business : A. Automatically continues under new management as a sole proprietorship. B. Automatically converts into a public corporation with stock sold to interested investors.
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4. As a young boy, Drew remembers his grandfather telling him, "Son, if you can find something you like to do, and somebody is willing to pay you to do it, well, that's the secret to a great life." The way Drew saw it, this was his big break. For the past five years, he split his time between school and working for a local tree farm/nursery business. The owner recently announced he was ready to retire. As Drew began creating a business plan, he contemplated what the business might be worth? How much will he need to buy this business? For starters, Drew A. needs to find a government data base that outlines what nursery businesses are worth, on average, across the country. B. should speak with the current owner and determine the total value of assets (what the business owns), its earning potential, and its unique advantage. C. will want to determine the assessed value of the acreage that the business owns, and then bid competitively. D. needs to understand that it's difficult to buy an existing business, rather than start your own. The key will be to meet with the company's accountant, and explain your interest. The accountant will have all the answers.
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home offices in Lansing, MI. The local media often remarks about the pristine landscaping that surrounds the home office that sits on a 30-acre complex. At the back end of the complex are several large warehouses and garages that hold large equipment. The grounds surrounding these warehouses look like a well-maintained park. Across the street from the garages are several shops and businesses. The CEO, "Planet Paul" (as his employees call him), often talks about how thankful he is that the town permits him to store the company equipment at that site, and vows to always maintain the premises for his neighbors (the other businesses that thrive in that area), not to mention that he asks 100 employees to come to work there everyday. Which of the following statements describes Planet Paul's business philosophy?
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