A company that is starting out depends on wholesalers to call on retail stores to promote their product. What benefit of intermediaries is illustrated in this example?
A) Breaking bulk
B) Efficiency and assortment of goods
C) Instant sales infrastructure
D) Assumption of credit risks
E) Valuable marketing information
Question 2
Derek and his friend, Tim, own a bicycle shop. Tim works at the store full-time, whereas Derek only works on the weekends. Derek invested 5000 in the business to get it started, plus he owned the building the shop is housed in, which is worth 50,000. Derek invested 15,000 in the business. Derek and Tim will split this year's profits of 130,000, with Tim getting 40 of the profits and Derek getting 60 because:
A) their business is a corporation, and they will split the profits according to each owner's percentage of ownership.
B) their business is an LLC, and Derek invested more money in the company initially.
C) their business is a corporation, and Tim's investment in the company is equal to 40.
D) their business is a partnership, and Tim works more hours at the shop than Derek.
E) their business is a partnership, and they will distribute the profits according to the terms of the partnership agreement.
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