Question

PLEASE ANSWER CORRECT RESPONSE

1.What is NOT one reason founders are important to companies?

A.They create the company culture.

B.They own the majority of common stock.

C.They set the vision for the company.

D.They have the millionaire's mindset.

2.How do laws protect consumers?

A.Force companies to disclose information

B.Only allow companies to sell safe products

C.Allow harmed consumers to sue companies

D.A and B

E.A and C

3.Why don’t startups take bank loans?

A.Interest rates are high

B.They are too risky for banks

C.Banks are not innovative

D.All of the above

4.What is a benefit to being an S-Corp?

A.Double taxation

B.Pass-through taxation

C.Raise money from unlimited investors

D.A and C

5.How do laws protect consumers?

A.Force companies to disclose information

B.Only allow companies to sell safe products

C.Allow harmed consumers to sue companies

D.A and B

E.A and C

6.Why don’t startups take bank loans?

A.Interest rates are high

B.They are too risky for banks

C.Banks are not innovative

D.All of the above

7.What is a benefit to being an S-Corp?

A.Double taxation

B.Pass-through taxation

C.Raise money from unlimited investors

D.A and C

8.Which is most important to venture capitalists?

A.Innovation

B.Making the world a better place

C.Growth

D.Growth Rates

Answer 1

1. D - They have the millionaire's mindset.

2. E - A&C

3. A - Interest rates are high: since in the initial years startups usually do not earn anything, a fixed interest rate of bank loan is a costly option of raising funds.

4. B - Pass through taxation: Any business income or loss is "passed through" to shareholders who report it on their personal income tax returns. This means that business losses can offset other income on the shareholders’ tax returns to reduce income tax paid.

5. E - A&C

6. A - Interest rates are high: since in the initial years startups usually do not earn anything, a fixed interest rate of bank loan is a costly option of raising funds.

7. B - Pass through taxation: Any business income or loss is "passed through" to shareholders who report it on their personal income tax returns. This means that business losses can offset other income on the shareholders’ tax returns to reduce income tax paid.

8. C - Growth: Venture capitalists invest in startups with a hope that after a few years the startup will start growing and give returns.