Which of the following is not one of the four factors identified in the textbook as
critical in selecting a form of business ownership?
A) The cost of setting up and maintaining the legal form
B) The number and types of investors involved
C) Accounting considerations
D) Tax considerations
E) The extent to which personal assets can be shielded from the liabilities of the
business
Answer:
Which element of the marketing mix is the only one that produces revenue?
A) Product
B) Place (or distribution)
C) Advertising
D) Price
E) Promotion
Answer:
In the context of strategic alliances, ________ alliances feature cooperation in research
and development, engineering, and manufacturing.
A) administrative
B) directorial
C) marketing
D) organizational
E) technological
Answer:
According to the textbook, the ________ are the heart of the financial section of a
business plan.
A) financial ratios
B) pro forma financial statements
C) budgets
D) sources and uses of funds statements
E) break-even analyses
Answer:
The What Went Wrong? feature for Chapter 8 focuses on Wise Acre Frozen Treats, a
company that made organic popsicles from unrefined sweeteners. According to the
feature, Wise Acre Frozen Treats failed largely because it ________.
A) grew too quickly, which overwhelmed its cash flow
B) was not careful enough in preparing its pro forma financial statements
C) was not efficient in the way it utilized its assets
D) spent too much money on marketing
E) did not compare its financial ratios to industry peers
Answer:
A ________ is a single Web page that typically provides direct sales copy, like “click
here to buy a Hawaiian vacation.”
A) sales page
B) marketing page
C) destination page
D) call for action page
E) landing page
Answer:
The most notable SBA program available to small businesses is the ________.
A) SBA 1060 Guaranty
B) Code 604 Guaranty Program
C) 7(A) Guaranty Program
D) SBA 101 Program
E) Small Business 401 Program
Answer:
The What Went Wrong feature in Chapter 11 focuses on a series of missteps at
JCPenney under the tenure of then CEO Ron Johnson. According to the feature,
Johnson’s three most damaging marketing-related mistakes were ________.
A) no testing of ideas in advance, poor product quality, and poor sales training for
employees
B) reluctance to embrace online sales, a shift from value-based to cost-based pricing,
and poor sales training for employees
C) poor product quality, a total misread of JCPenney’s brand, and poor use of social
media
D) Fair and Square Pricing, no testing of ideas in advance, and a total misread of
JCPenney’s brand
E) poor use of social media, Fair and Square Pricing, and poor sales training for
employees
Answer:
According to the textbook, a franchisee’s weekly or monthly royalty fees are typically
around ________ to ________ percent of gross income.
A) 1; 2
B) 2; 3
C) 3; 4
D) 4; 5
E) 5; 6
Answer:
Which of the following is not one of the five common myths about entrepreneurs?
A) Entrepreneurs are tenacious.
B) Entrepreneurs are moderate risk takers.
C) Entrepreneurs should be young and energetic.
D) Entrepreneurs love the spotlight.
E) Entrepreneurs are born not made.
Answer:
Partnerships are organized as either ________ or ________ partnerships.
A) specific; general
B) narrow; broad
C) inward; outward
D) general; limited
E) partial; full
Answer:
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
Answer:
Which of the following statements is incorrect regarding sole proprietorships?
A) There is one owner.
B) Sole proprietor is in full control.
C) Business ends at the owner’s death or loss of interest in the business.
D) Liquidity of the investment is high.
E) Money must be raised by the sole proprietor.
Answer:
Katlin Smith is investigating the feasibility of developing an iPhone app to help high
school students with math. To get a good handle on the potential demand for her
service, Katlin is scrounging around for information wherever she can find it. She even
spent two weeks volunteering as a math tutor at a local high school to see how students
responded to her methods. Katlin is conducting ________ research.
A) parallel
B) derivative
C) gumshoe
D) secondary
E) on-the-ground
Answer:
The ________ is a form of business organization that is rapidly gaining popularity in
the United States. The concept originated in Germany and was first introduced in the
United States in the state of Wyoming.
A) limited partnership
B) general partnership
C) limited liability company
D) subchapter S corporation
E) C corporation
Answer:
The document that lays out specifically how much money a firm needs, where the
money will come from, and what the money will be used for is referred to as a(n)
________.
A) sources and uses of funds statement
B) assumptions sheet
C) pro forma financial statement
D) credit and debit statement
E) capital and operational budgeting statement
Answer:
The three types of business plans are ________.
A) functional business plan, full business plan, feasibility plan
B) summary business plan, contingency plan, full business plan
C) functional business plan, contingency plan, full business plan
D) opportunity plan, feasibility plan, full business plan
E) summary business plan, full business plan, operational business plan
Answer:
Which of the following is the most important thing that an entrepreneur, or team of
entrepreneurs, can do to build a strong ethical culture in their organization?
A) Implement an ethics training program
B) Write a mission statement
C) Lead by example
D) Hire an ethics compliance officer
E) Write a code of conduct
Answer:
________ costs are the costs a company incurs as it makes sales.
A) Static
B) Irregular
C) Balanced
D) Variable
E) Flexible
Answer:
Advertising, commissions, download fees, licensing, and product sale are examples of
________.
A) revenue streams
B) basis of differentiation
C) key assets
D) channels
E) cost structure
Answer:
The Savvy Entrepreneurial Firm feature in Chapter 5 focuses on three firms that are
doing well in crowded industries as ________.
A) they have effectively differentiated themselves from their competitors and have
captured a first-mover advantage
B) they have passionate leaders and run savvy promotional campaigns
C) they have captured a first-mover advantage and have unique business models
D) they create meaningful value for customers at a fair price and have differentiated
themselves from their competitors
E) they are low-cost leaders and run savvy promotional campaigns
Answer:
Peter Simmons owns a specialized computer software company. Although Peter’s
software designers and programmers are very good, it takes 2-3 years to develop a good
software product. This example illustrates the need for funding or financing referred to
as ________.
A) personnel costs
B) marketing costs
C) costs associated with building a brand
D) lengthy product development cycles
E) cash flow challenges
Answer:
The ________ is a short overview of the entire business plan.
A) summary statement
B) executive summary
C) managerial review
D) founder’s introduction
E) abstract
Answer:
Which of the following statements about advisory boards is incorrect?
A) If a firm has a board of directors, it is not permitted to have an advisory board.
B) Many people are more willing to serve on a company’s board of advisors than its
board of directors because it requires less time and there is no potential legal liability
involved.
C) Most boards of advisers have between 5 and 15 members.
D) A growing number of startups are forming advisory boards.
E) An advisory board can be established for general purposes or can be set up to
address a specific issue or need.
Answer:
Which of the following is not a source of equity funding?
A) Initial public offering
B) Angel investors
C) Private placement
D) Venture capital
E) Government grants
Answer:
Jack Wills owns a commercial nursery. Jack has more business than he wants, in fact,
he is presently turning away exciting new business opportunities because it is expensive
to hire new employees, and he knows that if he did hire new employees it would take
time for the new employees to be trained and to be socialized into the culture of his
firm. Jack’s inability to take advantage of the new business opportunities that are
coming his way is due largely to the ________ problem.
A) business aptitude
B) entrepreneurial aptitude
C) commercial opportunity
D) business capacity
E) managerial capacity
Answer:
The members of heterogeneous teams are ________.
A) diverse in terms of their abilities and experiences
B) diverse in terms of their abilities, but very similar in terms of their experiences
C) similar in terms of their abilities and experiences
D) diverse in terms of their experiences, but very similar in terms of their abilities
E) sometimes diverse in terms of their abilities and experiences and sometimes similar
along the same dimensions
Answer:
The two major advantages of getting a loan versus investment capital are ________.
A) the money doesn’t have to be paid back and lenders typically take an active interest
in their borrowers
B) banks are reliable sources of funding for startups and interest payments are tax
deductible
C) the money doesn’t have to be paid back and no ownership in the firm is surrendered
D) no ownership in the firm is surrendered and interest payments are tax deductible
E) banks are reliable sources of funding for startups and lenders typically take an active
interest in borrowers
Answer:
An area franchise agreement allows a franchisee to own and operate a specific number
of outlets in a particular geographic area.
Answer:
According to the textbook, the main disadvantage of buying a franchise is ________.
A) franchise organizations typically grow slower than non-franchise organizations in
the same industry
B) franchisors typically provide poor levels of support
C) the cost involved
D) the service sector of the U.S. economy is waning in importance
E) franchising is waning in its popularity
Answer:
________ feasibility is an assessment of the overall appeal of the product or service
being proposed.
A) Consumer
B) Industry/market segment
C) Industry/market
D) Product/service
E) Purchaser/end-user
Answer:
________ relationships are characterized by frequent interactions that form between
coworkers, friends, and spouses.
A) Balanced
B) Weak-tie
C) Lateral-tie
D) Moderate-tie
E) Strong-tie
Answer:
________ financial statements are projections for future periods based on forecasts and
are typically completed for two to three years into the future.
A) Chronological
B) Pro forma
C) Ad-hoc
D) Concurrent
E) Historical
Answer:
Which of the following statements is incorrect regarding entrepreneurial activity and
age range?
A) The highest percent of business owners fall in the 30-39 age range.
B) The lowest percent of business owners fall in the 60+ age rage.
C) The majority of business founders have no prior work experience.
D) The majority of individuals who start companies are in their thirties and forties.
E) Entrepreneurial activity is fairly evenly spread out over age ranges.
Answer: