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41) ________ feasibility analysis is an assessment of the overall appeal of the industry and
market for the product or service being proposed.
A) Institutional
B) Financial
C) Organizational
D) Product/service
E) Industry/target market
42) Which of the following issues should be considered in industry/target market feasibility
analysis?
A) Gaps in the marketplace
B) Financial performance of similar businesses
C) Resource sufficiency
D) Industry attractiveness
43) Which of the following is NOT an attribute of an attractive industry?
A) Is young rather than old
B) Is not crowded
C) Is late rather than early in its life cycle
D) Is important to the customer
E) Is fragmented rather than concentrated
44) Mintel, IBISWorld, and Bizminer are databases most likely to be used during the ________
feasibility stage of the feasibility analysis process.
A) organizational
B) economic
C) political/legal
D) industry/target market
E) product/service
45) Which of the following statements about target markets is incorrect?
A) There is a distinct difference between a firm’s industry and its target market.
B) The challenge in identifying an attractive target market is to find a market that’s large enough
for the proposed business but is yet small enough to avoid attracting larger competitors.
C) By focusing on a target market, a firm can usually avoid head-to-head competition with
industry leaders and can focus on serving a specialized market very well.
D) A target market is a place within a larger market segment that represents a narrower group of
customers with similar needs.
E) It’s generally easier to find good information about a target market than an industry as a
46) ________ feasibility analysis is conducted to determine whether a proposed business has
sufficient management expertise, organizational competence, and resources to successfully
launch its business.
A) Industry/market
B) Institutional
C) Financial
D) Organizational
E) Product/service
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47) Industry/target market feasibility is an assessment of the overall appeal of the industry and
the target market for the product or service being proposed.
48) Describe the purpose of industry/target market feasibility analysis, and identify the two
primary issues that should be considered. What is the difference between a firm’s industry and its
target market?
49) The two primary issues to consider in organizational feasibility analysis are ________.
A) target market attractiveness and financial rate of return
B) management prowess and resource sufficiency
C) capital requirements and industry attractiveness
D) concept testing and financial rate of return
E) industry attractiveness and overall attractiveness of the investment
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50) The two primary issues to consider in organizational feasibility analysis are management
prowess and ________.
A) market timeliness
B) concept testing
C) resource sufficiency
D) target market attractiveness
E) total startup cash needed
51) A(n) ________ team is the group of founders, key employees, and advisers that either
manage or help manage a new business in its startup years.
A) opening
B) entrepreneurial
C) scout
D) launch
E) new venture
52) According to the textbook, two of the most important factors to consider regarding
“management prowess” are ________.
A) the passion the sole entrepreneur or the management team has for the business idea and the
extent to which the management team or sole entrepreneur understands the markets in which the
firm will participate
B) whether the members of the management team have worked successfully together before and
the passion the sole entrepreneur or the management team has for the business idea
C) whether the members of the management team are good “networkers” and the extent to which
the management team or sole entrepreneur understands the markets in which the firm will
participate
D) the educational and functional backgrounds of the management team or sole entrepreneur
E) whether the members of the management team are good “networkers” and the passion the sole
entrepreneur or the management team has for the business idea
53) The focus in organizational feasibility analysis is on ________.
A) financial resources for manufacturing firms and nonfinancial resources for service firms
B) financial resources for service firms and nonfinancial resources for manufacturing firms
C) nonfinancial and financial resources equally
D) nonfinancial resources
E) financial resources
54) An excellent resource for doing a quick trademark search is ________.
A) Trademarkia
B) Trademarkepedia
C) Wikitrademarks
D) Trademarkdata
E) GlobalTrademarks
55) The Partnering for Success feature in Chapter 3 focuses on the task of finding the right
business partner. According to the feature, which of the following is an incorrect rule-of-thumb
in finding a business partner?
A) Know the skills and experiences you need in a partner.
B) Make sure you and your partner’s work habits are compatible.
C) Make sure you and your partner have common goals and aspirations.
D) Pick a partner that is similar rather than different from you in terms of skills, abilities, and
functional background.
E) Hire a lawyer to negotiate the partnership agreement.
56) Which of the following is an example of a resource that normally would not be evaluated as
part of the “resource sufficiency” stage of organizational feasibility analysis?
A) Ability to form favorable business partnerships
B) Financial resources
C) Affordable office space
D) Key equipment needed to operate the business
E) Key support personnel
57) To test resource sufficiency, a firm should list the ________ most critical non-financial
resources that it will need to move its business idea forward and determine if those resources are
available.
A) 1 to 2
B) 3 to 5
C) 6 to 12
D) 10 to 16
E) 15 to 25
58) Organizational feasibility analysis is conducted to determine whether a proposed business
venture has sufficient management expertise, organizational competence, and resources to
successfully launch its business.
59) The focus in organizational feasibility analysis is on financial resources.
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60) The two primary areas to consider in organizational feasibility analysis are management
prowess and resource sufficiency.
61) A new venture team is the group of founders, key employees, and advisers that either
manage or help manage a new business in its startup years.
62) In regard to management prowess, two of the most important factors in this area are the
passion that the solo entrepreneur or the management team has for the business idea and the
extent to which the management team or solo entrepreneur understands the markets in which the
firm will participate.
63) ________ feasibility analysis is a quick financial assessment of the viability of a business
idea.
A) Organizational
B) Institutional
C) Product/service
D) Financial
E) Industry/market
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64) The most important issues to consider in financial feasibility analysis are ________.
A) resource sufficiency, industry attractiveness, and total startup cash needed
B) total startup cash needed, financial performance of similar businesses, and the overall
financial attractiveness of the proposed venture
C) target market attractiveness, resource sufficiency, and product/service demand
D) total startup cash needed, management prowess, and product/service demand
E) concept testing, total startup cash needed, and financial performance of similar businesses
65) The most important issues to consider in financial feasibility analysis are: financial
performance of similar businesses, total cash needed, and ________.
A) the projected internal rate of return of the proposed venture
B) the projected years to an IPO or an acquisition for the proposed venture
C) management prowess
D) overall attractiveness of the proposed venture
E) the projected borrowing power of the proposed business
66) Which of the following is incorrect regarding the “total startup cash needed” component of
financial feasibility analysis?
A) It’s not necessary to complete an actual budget of startup expenses.
B) When explaining where the startup funds will come from, avoid cursory explanations such as
“I plan to bring investors on board” or “I’ll borrow the money.”
C) There are worksheets posted online that help entrepreneurs determine the startup costs to
launch their venture.
D) An explanation of where the startup funds will come from should be included.
E) If the money will come from friends and family or is raised through other means, a reasonable
plan should be stipulated to repay the money.
67) Which of the following factors is a negative as it pertains to the financial feasibility of a
business venture?
A) Steady and rapid growth in sales during the first five to seven years in a clearly defined
market niche
B) High percentage of recurring revenue—meaning that once a firm wins a client, the client will
provide recurring sources of revenue
C) Inability to forecast income and expenses with a reasonable degree of accuracy
D) Internally generated funds to finance and sustain growth
68) Which of the following factors is a positive as it pertains to the financial feasibility of a
business venture?
A) Inconsistent and slow growth in sales during the first five to seven years in a clearly defined
market niche
B) High percentage of recurring revenue
C) Inability to forecast income and expenses with a reasonable degree of accuracy
D) Reliance on externally generated funds to finance and sustain growth
E) Absence of an existing opportunity for investors to convert equity into cash
69) For financial feasibility analysis, a very detailed and comprehensive financial analysis is
required.
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70) The most important issues to consider in financial feasibility analysis are total startup cash
needed, financial performance of similar businesses, and overall financial attractiveness of the
proposed venture.
71) The template for completing a feasibility analysis included in Appendix 3.2 of the book is
called the ________ analysis.
A) First Evaluation
B) Initial Screen
C) First Pass
D) First Screen
E) Flash Screen
72) The First Screen feasibility analysis template included in Chapter 3 is called “First Screen”
because ________.
A) it is the first feasibility analysis template created
B) it is the first and most important step in the opportunity recognition process
C) it is the first step in a sequence of several steps that must be completed before a business idea
is deemed to be feasible
D) feasibility analysis is an entrepreneur’s initial or first pass at determining the feasibility of a
business idea
E) it is the first of several “screens” that a business idea must pass through before it is considered
to be feasible
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73) The mechanics for filling out a First Screen worksheet are complicated.
74) First Screen is a template for completing industry analysis.
75) Briefly describe the purpose of the First Screen and how it’s used.