Financial management deals with raising money and managing a company’s finances in
a way that achieves the highest rate of return.
Answer:
Census Bureau data, analyst forecasts, and other pertinent information gleaned through
library and Internet research are examples of primary research.
Answer:
For financial feasibility analysis, a very detailed and comprehensive financial analysis
is required.
Answer:
According to Penrose, managerial services generate new market, product, and service
ideas, while entrepreneurial services administer the routine functions of the firm and
facilitate the proper execution of new opportunities.
Answer:
External growth strategies rely on establishing relationships with third parties, such as
mergers, acquisitions, strategic alliances, joint ventures, licensing, and franchising.
Answer:
Creativity and innovation are almost identical concepts.
Answer:
Franchising is a popular form of business growth.
Answer:
The number of angel investors in the United States has decreased dramatically over the
past decade.
Answer:
Typically, the seed money that gets a company off the ground comes from a commercial
bank.
Answer:
A trade secret is any formula, pattern, physical device, idea, process, or other
information that provides the owner of the information with a competitive advantage in
the marketplace.
Answer:
In cost-based pricing, the list price is determined by estimating what customers are
willing to pay for a product and then backing off a bit to provide a cushion.
Answer:
Most entrepreneurial firms are reluctant to try to grow.
Answer:
An acquisition is the pooling of interests to combine two or more firms into one. A
merger is the outright purchase of one firm by another.
Answer:
The two primary audiences for a firm’s business plan are a firm’s employees and
investors and other external stakeholders.
Answer:
The majority of franchisors are highly ethical individuals who are interested only in
making a fair return on their investment.
Answer:
A concept statement should be two to three pages long.
Answer:
An important distinction should be made between a firm’s core product and its actual
product. While the core product may be a CD that contains an antivirus software
program, the actual product may have a number of characteristics, including a quality
level, features, design, a brand name, and packaging.
Answer:
A company’s channels describe how it delivers its product or service to its customers.
Answer:
The five stages of the creative process include preparation, incubation, insight,
evaluation, and elaboration.
Answer:
To make the best impression, a business plan should follow a conventional structure.
Answer:
An organizational chart is a graphic representation of how authority and responsibility
are distributed within a company.
Answer:
According to the textbook, Southwest Airlines introduced a new market disruption type
of disruptive business model.
Answer:
The entrepreneurial process consists of four steps: deciding to become an entrepreneur,
developing successful business ideas, moving from an idea to an entrepreneurial firm,
and divesting or selling the entrepreneurial firm.
Answer:
Trade secret disputes arise most frequently when one firm alleges that a trade secret
claimed by another firm is common knowledge, and can therefore be used by anyone.
Answer:
Innovation is the process of creating something new, which is central to the
entrepreneurial process.
Answer:
According to the textbook, the executive summary is arguably the most important
section of the business plan.
Answer:
A founders’ agreement is a written document that deals with issues such as the relative
split of the equity among the founders of the firm.
Answer:
Franchisees are often required to pay into a national or regional advertising fund, even
if the advertisements are directed at goals other than promoting the franchisor’s product
or service.
Answer:
The management team and company structure section of a business plan is one of the
lesser-read sections.
Answer:
Business trends include economic trends, social trends, technological advances, and
political and regulatory changes.
Answer:
A company’s product/market scope defines the products and markets on which it will
concentrate.
Answer:
Homogeneous teams are diverse in terms of their abilities and experiences.
Answer:
Established firms with an entrepreneurial emphasis are proactive, innovative, and
risk-taking.
Answer:
The Partnering for Success feature in Chapter 4 focuses on the types of partnerships
that are common in business plans. According to the feature, businesses often make
partnering an essential part of their business plans because they ________.
A) want to obtain a key customer
B) want to increase their visibility
C) want to reduce risk
D) want to appear legitimate
E) have limited resources
Answer:
Which “phase” of the SBIR Program is a six-month feasibility study in which the
recipient must demonstrate the technical feasibility of the proposed innovation?
A) Phase I
B) Phase II
C) Phase III
D) Phase V
E) Phase X
Answer:
Southwest Airlines is an example of a ________ disruptive business model.
A) low-end
B) new-market
C) high-quality
D) new-product
E) new-channel
Answer:
The What Went Wrong? feature in Chapter 1 focuses on Prim, a failed startup in the
laundry industry. According to the feature, Prim failed largely as a result of ________.
A) lack of product/customer focus
B) poor intellectual property protection
C) the individuals who started the firm were too young and inexperienced
D) poor execution intelligence
E) a lack of passion and resolve
Answer:
The template for completing a feasibility analysis included in Appendix 3.1 of the book
is called the ________ analysis.
A) First Evaluation
B) Initial Screen
C) First Pass
D) First Screen
E) Flash Screen
Answer:
Which of the following is an example of intellectual property?
A) DripCatch’s cash reserves
B) The computer that you use
C) Nike’s swoosh logo
D) United’s fleet of planes
E) Google’s headquarters in Mountain View, California
Answer:
Amy has just launched a firm in the sports drink industry. She has decided to complete
a grid to see how she stacks up against her competitors. Along the horizontal axis of the
grid she lists her firm along with her major competitors. Along the vertical axis of the
grid she lists the main competitive factors in her industry. Amy is completing a
________.
A) strategic analysis spreadsheet
B) tactical analysis framework
C) competitive analysis grid
D) strategic analysis grid
E) behavioral analysis spreadsheet
Answer:
________ is the process in which an impartial third party helps those involved in a
dispute reach an agreement.
A) Conciliation
B) Reconciliation
C) Negotiation
D) Appeasement
E) Mediation
Answer:
According to the Global Entrepreneurship Monitor (GEM) 2013 survey, about
________ percent of adults in the United States are either starting a business or are
running a business that has been in existence for less than 3 1/2 years.
A) 8
B) 5
C) 6
D) 0
E) 7
Answer:
The three ways to identify an opportunity include ________.
A) observing trends, solving a problem, and finding gaps in the marketplace
B) studying industry trade journals, talking to consumers, and solving a problem
C) observing trends, conducting brainstorming sessions, and studying industry trade
journals
D) observing trends, talking to consumers, and finding gaps in the marketplace
E) reading books, solving a problem, and findings gaps in the marketplace
Answer:
A utility patent is good for ________ years from the date of the original application, a
design patent is good for ________ years from the date the patent is granted, and a plant
patent is good for ________ years from the date of the original application.
A) 14; 14; 20
B) 20; 20; 14
C) 20; 20; 20
D) 20; 14; 20
E) 14; 20; 14
Answer:
According to Penrose, ________ services generate new market, product and service
ideas, while ________ services administer the routine functions of the firm and
facilitate the profitable execution of new opportunities.
A) managerial; entrepreneurial
B) administrative; business
C) entrepreneurial; managerial
D) business; commercial
E) commercial; administrative
Answer:
Efforts to establish and maintain a company’s image with the public are referred to as
________.
A) open relations
B) public relations
C) civic relations
D) community relations
E) advertising
Answer:
In regard to budgets, which of the following statements is not true?
A) Budgets include an itemized forecast of a company’s expenses.
B) Budgets are a poor tool for financial control.
C) Budgets are an important tool for financial planning.
D) Budgets include an itemized forecast of a company’s capital needs.
E) Budgets include an itemized forecast of a company’s income.
Answer:
Which section of the Barringer/Ireland Business Model Template is the only section
that describes how it makes money?
A) Core strategy
B) Resources
C) Financials
D) Operations
E) Value proposition
Answer:
The Partnering for Success feature in Chapter 5 focuses on three things that are
important for startups to become active in to learn the ins and outs of their industries.
The three items focused on in the feature are ________.
A) local Chambers of Commerce, trade journals, and networking events
B) Facebook, industry-related e-mail listservs, and trade shows
C) trade associations, trade shows, and trade journals
D) networking events, blogs, and Facebook
E) local Chambers of Commerce, city or university-sponsored incubators, and trade
associations
Answer:
Kyle White owns a sporting goods store that appeals to hunters and fishermen. The
market that Kyle is trying to appeal to is called his ________ market.
A) focal
B) objective
C) target
D) critical
E) intention
Answer:
Shake Smart, the company profiled in the opening feature of Chapter 14, sells nutritious
smoothie-like shakes. The first place the shakes were sold was ________.
A) at a pop-up store in the Memorial Union on the Iowa State University campus
B) at a kiosk just outside the Aztec Center on the San Diego State University campus
C) at concession stands in Spartan Stadium on the Michigan State University campus
D) on central campus at the University of Nebraska campus
E) in the Lory Student Center on the Colorado State University campus
Answer:
The first patent, which was granted for a process of making potash, an ingredient in
fertilizer, was signed by ________.
A) John Adams
B) Thomas Jefferson
C) Abraham Lincoln
D) Theodore Roosevelt
E) George Washington
Answer:
Which of the following is an advantage of growth by means of external growth
strategies?
A) Gaining access to new products and markets
B) Increased business complexity
C) Clash of corporate cultures
D) Antitrust implications
E) Loss of organizational flexibility
Answer:
Jessica Smith is thinking about starting a chain of fitness centers for young adults ages
18-30. Which of the following is not an appropriate criterion for Jessica to test her idea
against?
A) Determine whether the “window of opportunity” is open.
B) Determine whether a fitness center for young adults ages 18-30 meets the threshold
of being a good idea.
C) Determine the extent to which the notion takes advantage of an environmental trend,
solves a problem, or fills a gap in the marketplace.
D) Determine whether opening a fitness center for young adults ages 18-30 is timely.
E) Determine whether opening a fitness center for young adults ages 18-30 is a concept
that creates value for its buyer or end user.
Answer:
Which of the following companies is suitable for franchising?
A) Home Depot
B) Dropbox
C) Qdoba Mexican Grill
D) Walmart
E) GoPro
Answer:
Uptown Cheapskate, the company profiled in the opening feature of Chapter 15, was
started by Chelsea and Scott Sloan. According to the feature, Chelsea and Scott decided
to grow Uptown Cheapskate via franchising because they wanted to ________.
A) grow quickly without making a huge investments in real estate
B) capture the prestige of being a franchise organization
C) maintain maximum control of their business while at the same time maximizing
profits
D) grow quickly while at the same time maintaining maximum control of their business
E) grow slowly while at the same time maximizing profits
Answer:
Which of the following was not identified in Chapter 14 as one of the top five reasons
new products fail?
A) The potential market was overestimated.
B) Customers saw the product as too expensive.
C) Lack of passion for the product
D) The product was no different than the competition’s.
E) The costs of developing the product line were too high.
Answer:
According to the textbook, the single most important thing the founders of an
entrepreneurial venture can do is ________.
A) start a board of advisors
B) establish business partnerships
C) make money
D) select a limited liability corporation as opposed to an S-corporation
E) establish a strong ethical culture for their firms
Answer:
A firm’s marketing mix consists of ________.
A) product, price, promotion, and place
B) passion, pride, promotion, and place
C) passion, pleasure, product, and price
D) enthusiasm, passion, product, and price
E) place, promotion, passion, and product
Answer:
A ________ partnership is a modified form of a general partnership.
A) restricted
B) limited
C) partial
D) constrained
E) fractional
Answer:
A firm’s ________, in the context of its marketing mix, is the good or service it offers to
its target market.
A) conception
B) idea
C) formation
D) product
E) invention
Answer:
According to the textbook, entrepreneurs are ________.
A) gamblers
B) moderate risk takers
C) aggressive risk takers
D) forceful risk takers
E) minimal risk takers
Answer:
________ is the process of creating something new, which is central to the
entrepreneurial process.
A) Creative destruction
B) Modernism
C) Execution
D) Creativity
E) Innovation
Answer:
In the context of competitor analysis, ________ competitors offer close substitutes to
the product sold by the firm completing the analysis.
A) potential
B) direct
C) indirect
D) impending
E) future
Answer:
The document that consummates the sale of a franchise is called the ________.
A) franchise disclosure document
B) franchise agreement
C) license agreement
D) uniform franchise contract
E) franchise circular
Answer:
The four main financial objectives of a firm are _________.
A) efficiency, effectiveness, strength, and flexibility
B) power, success, efficiency, and effectiveness
C) control, effectiveness, liquidity, and power
D) success, strength, liquidity, and profitability
E) profitability, liquidity, efficiency, and stability
Answer: