The entrepreneur’s market knowledge is deeper than the knowledge that could be
gained through market research.
Experience is idiosyncraticunique to the life of the individual.
In the product development stage, consumer reaction to the physical product/service is
determined.
Popular reasons to merge include protection, diversification and survival.
The collective notebook method involves members recording their ideas at least once a
day for about a week.
When researching foreign markets, the entrepreneur will usually want data such as
population, GDP, per capita income, inflation rate, literacy rate, unemployment, and
education levels.
Bankruptcy should be a last resort for the entrepreneur.
In the business plan the entrepreneur should address the needs of the entrepreneur and
the needs of the market; the investor’s perspective is not important.
Contracts for the sale of real estate must be in writing to be valid.
First movers suffer a cost disadvantage as they are not able to move down the
experience curve.
The Gordon method, like most other methods, begins with group members not knowing
the exact nature of the problem.
For the franchisor, the capital required to expand a venture quickly is more than it
would be without franchising.
Under Chapter 13, the key to enhancing the bankruptcy process is by stressing the
significance of the creditors’ support during the process.
Investors usually insist that the management team not operate the business as a
part-time venture.
Negotiating how the benefits of the relationship will be allocated between the parties is
known as the distribution task.
The typical corporate culture has a climate and a reward system that favors activist
decision making.
The earnings approach is the most widely used method of valuing a company.
If a franchise looks good as an investment, the entrepreneur may request a franchise
package from the franchisor at no cost, which usually contains a draft franchise
agreement or contract.
The bargaining zone is the range of outcomes between the entrepreneur’s reservation
price and the reservation price of the other party.
Negotiating parties will often focus on the distribution task and ignore the integration
task.
Personal, face-to-face, surveys are the most effective and most expensive.
In the concept stage, the refined idea is tested to determine consumer acceptance.
When evaluating new product development, the criteria should be exclusive and
subjective.
Does Justin Parer have passion for his entrepreneurial businesses.
Emerging industries are industries that have been around for years but are just starting
to experience explosive growth.
Employee turnover for part-time workers is lower than that for full-time workers.
Private offerings involve more time, expense, and paperwork than public offerings.
Franchising allows the franchisor to benefit from economies of scale in purchasing.
The casual process of thinking starts with what one has and selects among possible
outcomes.
The most common type of franchise is the dealership.
Profit from the business will be included on the balance sheet in the assets section.
When using private placement funding the entrepreneur must disclose all information as
accurately as possible.
Idea lab is a combination of an incubator, a venture capitalist, and a business angel.
A design patent has a term of 14-years, beginning on the date of filing with the Patent
and Trademark Office (PTO).
Financial reporting to shareholders, bankers, and other investors give the marketing cost
for each product and highlight the performance of managers in controlling costs.
Previous start-up experience is a good predictor of starting subsequent businesses.
Within the moral-support network, most entrepreneurs indicate that their _____ are
their biggest supporters.
A.mentors
B.friends
C.parents
D.spouses
The concept that “the whole is greater than the sum of its parts” is known as:
A.the price earnings ratio.
B.synergy.
C.the bargaining zone.
D.integration.
Franchisees usually contribute _____ of sales to an advertising pool.
A.None, each franchisee pays for their own advertising
B.1-2%
C.4-5%
D.8-10%
Barriers to entry include all of the following except:
A.patents
B.switching costs
C.environmental instability
D.building customer loyalties
Creative synthesis is an important aspect of the _________ method of creative problem
solving.
A.brainwriting
B.forced association
C.attribute listing
D.parameter analysis
On the education background, entrepreneurs:
A.are less educated than the general population.
B.cite an educational need in the areas of finance, strategic planning, marketing, and
management.
C.who lack a formal education, fail to create new businesses and exploit discovered
opportunities.
D.cite formal education to be indispensible in starting a new business.
When inventory is the asset base for a loan:
A.a trust receipt is not generally used.
B.factoring may be arranged.
C.about 50 percent of it can be financed.
D.all of the inventory can be financed.
From the chapter on the characteristics of an entrepreneur, we know that after the
failure of a business entrepreneurs are likely to:
A.continue starting new ventures.
B.look for a position working for someone else.
C.go to work for the government.
D.try again and fail.
The part of the plan that describes the location and size of the business, the personnel
and office equipment that will be needed, and the history of the venture is called the:
A.organizational plan.
B.description of the venture.
C.production plan.
D.executive summary.
By delaying entry, late movers:
A.can learn from the actions of first movers without incurring the same costs.
B.have less information about market demand.
C.secure the window of opportunity.
D.can avoid high entry barriers.
In the _________ task, the mutual benefits from the relationship are explored, making
the “size of the pie” larger.
A.distributive
B.assessment
C.integrative
D.reservation
Which of the following is NOT a stage in Kolter’s procedure in bringing a
product/service to market?
A.Select target market segments
B.Analyze long run opportunities in the market
C.Design market strategies
D.File for patent protection
Venture capitalists:
A.usually don’t know one another.
B.tend to put more time and effort into business plans that were referred to them.
C.tend to invest in any area that has a good rate of return.
D.like entrepreneurs to bring in an accountant to verify financials.
Which of the following is not a common reason why business plans fail?
A.objectives are not measurable
B.no customer need was established
C.the entrepreneur has no experience in the planned business
D.the promotional strategy was not taken seriously
All of the following is true of the General Agreement on Tariffs and Trade except:
A.it includes over 100 nations.
B.it reduces tariffs, subsidies, and import quotas.
C.it has extensive authority to enforce trade practices due to its voluntary membership.
D.it is one of the longest-lasting agreements on trade.
Robert Mondavi came up with all of the following process innovations except:
A.steel fermentation tanks
B.vacuum corking of bottles
C.labels that indicated when the wine was cold
D.aging wines in new French oak barrels
(p.424-425)Suggestions for surviving bankruptcy include all of the following except:
A.focus efforts on preparing a realistic reorganization plan.
B.understand how protection against creditors works.
C.file only after cash runs out.
D.maintain good records.
_________ are used to protect the owner of the technology from people imitating the
technology.
A.Franchises
B.Switching costs
C.Patents
D.Distributors
Corporations distribute profits to owners through:
A.bonds.
B.taxes.
C.dividends.
D.interest.
Product innovation, diversification, protection against market encroachment are some
of the reasons why a company would opt for this:
A.Merger.
B.Acquisition.
C.Leveraged buyouts.
D.Lease.
The __________ is the range of outcomes between the entrepreneur’s reservation price
and the reservation price of the other party.
A.reservation price
B.franchise price
C.bargaining zone
D.break even price
Under Chapter 13, meeting with groups of creditors to amicably solve issues is usually
a good idea.
The _______ was established to facilitate patent filings in multiple countries.
A.General Agreement on Trades and Tariffs
B.Patent and Trademark Office
C.Sarbanes-Oxley Act
D.Patent Cooperation Treaty
Which of the following would be a quantitative way to ascertain the fairness of an
LBO’s asking price?
A.Price-earnings ratio
B.Book value
C.Present value of future earnings
D.All of the above
The basic balance sheet relationship is:
A.assets plus owner’s equity equal liabilities.
B.assets equal liabilities plus owner’s equity.
C.assets plus liabilities equal owner’s equity.
D.assets equal owner’s equity minus liabilities.
Define political risk analysis, and identify and briefly describe the three major types of
political risk.
(p.423-426)Which methods of bankruptcy require the entrepreneur to come up with a
payment plan?
A.Chapters 11 and 13
B.Chapters 7 and 11
C.Chapters 7 and 13
D.Chapters 7, 11, and 13
In the ________ method, a word is written down, then another, creating a chain of
ideas.
A.reverse brainstorming
B.matrix charting
C.heuristic
D.free association
All of the following would be an operations information need except:
A.raw materials.
B.break even numbers.
C.equipment.
D.labor skills.
The penetration growth strategy:
A.focuses on developing new products for the existing market.
B.relies on taking market share from competitors.
C.expands the firm’s product offering with complementary products.
D.aims to take new products into new markets.
______ is projected net profit calculated from projected revenue minus projected costs
and expenses.
A.Pro forma Income
B.Gross profit
C.Net sales
D.Cost of goods sold
Fixed assets are those that:
A.are intangible.
B.include cash.
C.will be used over a long period of time.
D.are similar to loans and advances.
Identify and describe, in order, each of the major stages of the venture capital process.