Chapter 6 Flashcards
A corporation is owned by whom?
Stockholders
Which one of these would not constitute an investment? A. Someone who buys 100 shares of Exxon mobile B. Exxon mobile purchases 20 new oil Riggs C. General Motors builds a new assembly plant D. Macy’s remodels it stores
Hey someone who buys 100 shares of Exxon mobile
To build up our capital we need to?
Save more and consume less
Investments will tend to be low when what?
Capacity utilization rate is low in the interest rate is high
Which of these is not an investment? A. Additional inventory B. The building of the country courthouse C. The building of the shopping mall D. The building of an automobile assembly line
B. the building of a county courthouse
A __________is a legal person.
Corporation
A key disadvantage of incorporating is
You will have to pay corporation income tax.
Inventory investment
Can either be positive or negative
Gross investment
Minus depreciation equals net investment.
During bad recessions, investment in plant and equipment will
Fall somewhat
Our capacity utilization rate is usually between
70 and 90
The expectation rate of profit is found by
Dividing expected profits by many invested
True or false only stockholders are owners of the corporation.
True
Since 1980 inventory investments has
Been both positive and negative
The largest sector of the gross investment is?
Plant and equipment
The least stable sector of the GDP is
I
The only time to invest is when the expected rate of profit is _________the interest rate.
Greater than
Benedict Arnold corporations are loyal to who?
The profits of their stockholders
Investment includes
An increase in business inventories.
What is the largest component of the gross private domestic investment in the United States?
Purchases of producer plants and durable equipment
True or false. Internal Revenue Service has disallowed the formation of limited liability corporation which have the legal installation of the corporation and the preferred tax treatment of the limited partnership.
False
A soul proprietorship is what?
Is simply and an individual in business for himself or herself
Which one is not an investment? A. Mr. Riddick buys a new home B. Mr. Randall Hopper purchases 500 shares of Dupont C.missed your call man adds a new wing to his factory D. The brewery purchases 100 new cars
B.
A business person would most likely invest ifSpace the expected profit rates were _______ and the interest rates were ________percentage.
20 and 14
Most business firms in United States are?
Proprietorships
