1
Appendix H for Unit Eight
Questions on the Features
N.B.: TYPE indicates that a question is new, modified, or unchanged, as follows.
N A question new to this edition of the Test Bank.
+ A question modified from the previous edition of the Test Bank.
= A question included in the previous edition of the Test Bank.
CHAPTER 36—INSIGHT INTO ETHICS:
SHOULD FRANCHISORS HAVE TO GIVE PROSPECTIVE FRANCHISEES
INFORMATION ABOUT POTENTIAL EARNINGS?
B1. Korean Hot Dogs Inc. offers entrepreneurs the opportunity to operate a
franchise under the Korean Hot Dogs trade name as a member of a select
group of dealers that engage in retail fast food sales. To potential investors, the
franchisor must provide
a. actual earnings figures.
b. hypothetical earnings figures.
c. projected earnings figures.
d. none of the choices.
CHAPTER 40—INSIGHT INTO ETHICS:
WHEN IS LYING A FEDERAL CRIME?
B2. Oswald, an employee of Pipes & Plumbing Company, fills out his time sheets
by rounding off his hours and thus effectively listing more time than he actually
worked. Pipes & Plumbing submits the time sheets to a federal regulatory
2 TEST BANK B—UNIT EIGHT: BUSINESS ORGANIZATIONS
agency. For Oswald to be held criminally liable for lying, the false information
on his time sheets must be
a. considered material.
b. made under oath.
c. made after a warning about the consequences of a false statement.
d. in writing.
UNIT EIGHT—FOCUS ON ETHICS:
BUSINESS ORGANIZATIONS
B3. Blaise is an officer with Core Business Services, Inc. Blaise is in a position to
acquire assets that would benefit the company if acquired in its name. Blaise’s
usurping this opportunity may violate the duty of
a. acting in one’s own interest.
b. agency.
c. care.
d. loyalty.
B4. Hobart, an officer with Investment Assets Corporation, misappropriates the
firm’s property through fraud. Later, Hobart and the corporation agree to a
mutual release of claims. Still later, Investment Assets discovers Hobart’s fraud
and files a suit to recover the misappropriated property. Most likely, the court
will rule that Hobart
a. breached his duty of loyalty by failing to disclose his misconduct.
b. is not liable due to his duty to act in his own self-interest.
c. is not liable due to the firm’s failure to timely discover the fraud.
d. is not liable due to the mutual release of claims.