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MNE_202V_June_Exam_2009_Eng_(222).final[1]

A increase in expense b decrease in total assets c

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a increase in expense b decrease in total assets c increase in return on investment d increase in sales 1 a b 2 b c 3 a d 4 c d 18 Creativity is ________. 1 the generation of frequent and common ideas 2 the result of thinking processes 3 an innate skill that cannot be acquired by means of training 4 the development of new products 19 The bank was impressed with John’s application for finance and his business plan, but suggested that he first register his business as a close corporation (CC). When registering his CC in South Africa, John will have to adhere to ____ legal prescriptions and incur ____ costs, unlike when registering a private company. 1 many; minor 2 few; minor 3 many; considerable 4 few; considerable
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MNE 202-V MAY/JUNE 2009 8 20 Portia Kale recently decided on a form of ownership for the preschool business she intends starting in Pretoria. The form of ownership she has chosen means that her business will have a separate legal personality and will be created by the registration of a founding statement. The type of business Portia has chosen is a ______ . 1 close corporation . 2 partnership . 3 section 21 company . 4 private company . 21 Identify the correct sequence of steps in the negotiation process when purchasing a business. a the buyer’s due-diligence investigation b drawing up of purchase agreement by the parties concerned c identification and approach of the business for sale d signing of non-disclosure document that ensures secrecy of the negotiations e making a transition to being a successful business owner f closure of the deal by the buyer and seller by signing necessary documents g signing of a letter of intent by the buyer 1 a c e d f g b 2 c a b f d g e 3 e c b a g f d 4 c d g a b f e 22 Which one of the following amalgamations is an example of horizontal integration ? 1 an abattoir purchasing a number of butcheries 2 a motor manufacturer purchasing a shoe factory 3 a tyre manufacturing company purchasing a tyre fitment enterprise 4 a national bookseller purchasing a number of small independent bookstores
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MNE 202-V MAY/JUNE 2009 9 23 Which one of the following statements best describes acquisition as an external growth method? 1 The venture expands without having to invest in a manufacturing plant. 2 The manufacturer grants a second party the right to sell the manufacturer’s product within a given period. 3 An existing business is purchased and is completely absorbed so that it no longer exists. 4 An entrepreneur is given an opportunity to expand his/her business by expanding the distribution channel of the venture. 24 The _____ was a document developed to protect franchisees from harmful business practices by the franchisor. a disclosure document b consumer code for franchise c franchise contract d FASA code of ethics 1 a b 2 b c 3 b d 4 a c 25 In terms of the levels of failure in a business, which of the following phrases best describes a venture that falls into the category of “venture in trouble or difficulty”? 1
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