Small Business Management Chapter 23 Exam Questions and Answers Latest Update (Already Passed)

Small Business Management Chapter 23 Exam Questions and Answers Latest Update (Already Passed) Business risk - Answers the possibility of losses associated with the assets and earnings potential of a firm market risk - Answers the uncertainty associated with an investment decision pure risk - Answers the uncertainty associated with a situation where only loss or no loss can occur real property - Answers land and anything physically attached to the land ,such as buildings personal property - Answers any property other than real property, including machinery, equipment, inventory, and vehicles. replacement value of property - Answers the cost of replacing personal property and rebuilding real property at today's prices actual cash value (ACV) - Answers an insurance term that refers to the depreciated value of property peril - Answers a cause of loss, either through natural events or through the actions of people -windstorms, flooding, earthquakes, and lighting direct loss - Answers a loss in which physical damage to property reduces its value to the property owner indirect loss - Answers a loss arising from an inability to carry on normal operations due to a direct loss of property workers' compensation legislation - Answers laws that obligate an employer to pay employees for injury or illness related to employment, regardless of fault indemnification clause - Answers a contractual clause that requires one party to assume the financial consequences of another party's legal liabilities torts - Answers wrongful acts or omissions for which an injured party can take legal action against the wrongdoer for monetary damages Four elements must be present for someone to be found guilty of a negligent act (tort): - Answers 1) Existence of a legal duty between the parties- restaurant providing food and drink that is fit for consumption 2) Failure to provide the appropriate standard of care 3) Presence of injury or damages 4) Evidence that the negligent act is the proximate cause of the loss Tort liability examples - Answers -Premises liability- people sustain injuries while on business premises -Operations liability- contractors performing work on job sites and getting injured -Professional liability- accounting firms, dental offices and doctors offices -Employers' Liability- injury on the job caused by faulty piece of equipment -Automobile liability- company vehicles -Product liability- manufacturer defect, design defect -Completed operations liability- new building someone leans against railing and it gives way causing harm to the person contractor is help liable - Employment practices liability- discrimination, sexual harassment, or wrongful termination reasonable (prudent person) standard - Answers the typical standard of care based on what a reasonable or prudent person would have done under similar circumstances compensatory damages - Answers economic or noneconomic damages intended to make the claimant whole by compensating the claimant for any injuries or loss arising from the negligent action economic damages - Answers compensatory damages that relate to economic loss, such as medical expenses and loss of income noneconomic damages - Answers compensatory damages for such losses as pain suffering, mental anguish, and loss of physical abilities punitive damages - Answers a form of punishment beyond compensatory damages that intends to punish wrongdoers for gross negligence or callous disregard and to have a deterrent effect proximate cause - Answers a negligent act that is the clear cause of damages sustained. manufacturing defect - Answers a defect resulting from a problem that occurs during the manufacturing process, causing the product to subsequently not be made according to specification design defect - Answers a defect resulting from a dangerous design, even though the product was made according to specifications marketing defect - Answers a defect resulting from failure to convey to the user that hazards are associated with a product or to provide adequate instructions on safe product use personnel risks - Answers risks that directly affect individual employees but may have an