Question

In: Finance

Rita wants to be involved in business. She has a fair amount of money to invest,...

Rita wants to be involved in business. She has a fair amount of money to invest, but she does not want to be involved in management. She wants to form a business in the quickest way possible under her circumstances. Which form of business would be best for Rita?

  • Corporation
  • Limited partnership
  • Sole proprietorship
  • LLC

Hal and Miranda have a general partnership business for landscaping projects. Hal makes a contract with a customer for a project one day while Miranda is absent and leaves on vacation the next day. Miranda does not feel she has the time to perform the contract for the customer. Which of the following is true?

  • Only Hal is obligated to perform the contract.
  • Miranda may relinquish her obligation to perform the contract since Hal signed it without her knowledge.
  • Indeterminable without more information.
  • Miranda is obligated to perform the contract.

Loptech, a technology firm, wants to issue bonds for investment purposes. Loptech has one of the best credit ratings in the industry. Market rates for debt instruments average at .5% interest. Based on its credit rating, Loptech would likely sell bonds that pay _____.

  • Indeterminable with current information
  • 0.75%
  • 0.25%
  • 0.5%

Cadence works for WilderCorp. She meets with a team to make all-encompassing decisions concerning the direction of the business. She also personally supervises managers and conducts training for supervisors and plant managers. Cadence also buys stock in WilderCorp. What is Cadence’s position in the company?

  • Shareholder
  • More than one option
  • Director
  • Executive

Solutions

Expert Solution

1) Rita wants to be involved in business. She has a fair amount of money to invest, but she does not want to be involved in management. She wants to form a business in the quickest way possible under her circumstances. Which form of business would be best for Rita?

Limited partnership will be best option for Rita, because limited partners (who invest their money or property in the business, do not have the right to make decisions regarding the operation of the business, and do not have personal liability for business debts). The limited partnership was designed to allow limited partners to invest in the business, but not have the drawback of personal liability.

2) Hal and Miranda have a general partnership business for landscaping projects. Hal makes a contract with a customer for a project one day while Miranda is absent and leaves on vacation the next day. Miranda does not feel she has the time to perform the contract for the customer. Which of the following is true? .

Miranda may relinquish her obligation to perform the contract since Hal signed it without her knowledge.

Cadence works for WilderCorp. She meets with a team to make all-encompassing decisions concerning the direction of the business. She also personally supervises managers and conducts training for supervisors and plant managers. Cadence also buys stock in WilderCorp. What is Cadence’s position in the company?

More than one option-


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