Edmentum Economics - Unit 2 - Lesson 5

Janet contacts local banks in order to find a loan with a low interest rate, so that she can fund her new business idea. This is an example of which type of financing?

• debt financing

• equity financing

Which of the following is NOT an advantage of debt financing?

• You do not give up ownership of your company

• You do not have to pay back lenders if the business fails

• You receive the funding that you need

• If the business is successful in the future, you won't need to share your profits with other investors

A ____________________ is a type of business owned and operated by a single individual.

• - Profits are taxed as personal income / -Owners have unlimited liability / - Two or more founders / -Able to raise more capital than a sole proprietorship

This describes which type of business?

• limited liability company

• joint venture

• partnership

• corporation

Owners of a corporation (investors) have _____________________, meaning that they are NOT fully responsible for the debts and obligations of the business.

Imagine that Vinfast and Grab work together to create a new product - a self-driving taxi. This partnership between the two existing companies is called a ___________

- Profits are taxed the same as personal income / -owners have limited liability / -a type of business that has some advantages of being a small business and some advantages of being a big business

• corporation

• limited liability corporation

• partnership

• joint venture

Which type of business is subject to additional taxes, often at a higher rate than other types of businesses?

• Sole proprietorships
• Limited liability companies
• Partnerships
• Corporations

Which type of business is able to raise the most funding, through debt financing and equity financing?

• Partnership

• Sole proprietorship
• Nonprofit organization
• Publicly traded company