PRC-3 · Chapter 1 · Question 32 of 61
Why is the federal tax authority classified as an 'external' stakeholder rather than a 'connected' stakeholder to a private business?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Because it lacks a direct commercial contract but impacts the firm through regulations and tax collection
Explanation
External stakeholders (like government and local communities) do not have a direct commercial relationship but exert influence through laws, taxes, or public pressure.
More Nature of Business MCQs
- Q34A national telecom company publishes a document stating its ultimate, long-term aspiration: 'To be the leading and most trusted provider…
- Q35Which of the following individuals or groups provides financial capital to a company and is considered a stakeholder, but is NOT…
- Q36An individual owns 500 shares in a large telecom company but does not participate in daily operations. A local supplier provides the…
- Q37A newly established bakery purchases two industrial-sized ovens to increase its daily bread production. In economic terms, which factor of…
- Q38Mr. Zain notices a lack of affordable ride-sharing services in his city. He invests his own savings, hires developers, and launches a new…