### What is the primary objective of a for-profit corporation? - [x] To maximize shareholder value - [ ] To fulfill charitable purposes - [ ] To break even financially - [ ] To exclusively serve the community > **Explanation:** The primary objective of a for-profit corporation is to maximize shareholder value by generating profit. ### How does a for-profit corporation distribute its earnings? - [x] As dividends to shareholders - [ ] As donations to charitable causes - [ ] Equally among all employees - [ ] Invested solely in government bonds > **Explanation:** Earnings in a for-profit corporation are distributed primarily as dividends to shareholders or reinvested in the company. ### What type of legal structure can a for-profit corporation follow? - [x] C Corporation or S Corporation - [ ] Limited Liability Partnership (LLP) - [ ] Sole Proprietorship - [ ] Cooperative > **Explanation:** For-profit corporations are typically structured as either C Corporations or S Corporations, each with specific tax and operational rules. ### Are non-profit organizations intended to generate profit for distribution to their members? - [ ] Yes, they distribute profit to their members. - [x] No, they do not intend to distribute profit to their members. - [ ] Only if they earn above a certain threshold. - [ ] Non-profits must generate profit by law. > **Explanation:** Non-profit organizations do not operate with the intention of distributing profits to their members; their purpose is to serve community-oriented missions. ### What is one key characteristic of a corporation? - [ ] It is always owned by the government. - [x] It is a legal entity separate from its owners. - [ ] It cannot distribute profits. - [ ] It must be a non-profit. > **Explanation:** A corporation is a legal entity that is separate from its owners, providing limited liability protection to its shareholders. ### What is a dividend in the context of a for-profit corporation? - [ ] A loan from the government. - [x] A payment made to shareholders from the company's earnings. - [ ] A type of tax exemption. - [ ] A mandatory expense for non-profits. > **Explanation:** Dividends are payments made by a corporation to its shareholders, usually from profits. ### What is the focus of management in a for-profit corporation? - [ ] Maintaining break-even status. - [x] Profit maximization. - [ ] Providing solely public services. - [ ] Ensuring no financial gain for owners. > **Explanation:** The management of a for-profit corporation focuses on profit maximization to ensure optimal returns for shareholders. ### Which term best describes the owners of a for-profit corporation? - [ ] Directors - [ ] Partners - [ ] Beneficiaries - [x] Shareholders > **Explanation:** Shareholders or stockholders own shares in the for-profit corporation and have an equity interest in the company's assets and earnings. ### How is a for-profit corporation different from a sole proprietorship? - [ ] A sole proprietorship has shareholders. - [ ] A for-profit corporation cannot earn profits. - [x] A sole proprietorship is owned by one person and has unlimited liability. - [ ] A for-profit corporation is not a legal entity. > **Explanation:** A sole proprietorship is owned by one individual who has unlimited liability, whereas a for-profit corporation has multiple shareholders and limited liability. ### Can a for-profit corporation reinvest its earnings? - [x] Yes, it can reinvest earnings. - [ ] No, it must distribute all earnings. - [ ] Only if shareholders approve. - [ ] It depends on federal regulations. > **Explanation:** A for-profit corporation can reinvest its earnings back into the company for growth and expansion, in addition to distributing dividends to shareholders.