Which of the following costs add to the cost of franchising?
a. insurance
b. payroll
c. legal and professional fees
d. all of the above
The inventory should be examined for which of the following?
a. salability
b. correspondence between the physical count and the book count
c. up-to-datedness
d. All of the above.
Hiring and promotions on the basis of nepotism rather than qualification fall under the
managerial problem of
a. human resource problem.
b. the concept of a team approach.
c. unclear business definition.
d. poor management.
Some buyers are willing to pay more for a business than what valuation methods
determine its worth to be. What are these buyers attempting to avoid?
a. start-up costs.
b. earlier losses.
c. previous profits.
d. all of the above.
Goodwill, family members on the payroll, and planned losses are examples of
a. analyzing the business.
b. underlying issues.
c. emotional bias.
d. establishing the value of a firm.
The textbook describes three types of leadership of consequence to new ventures. What
are they?
a. competitive, innovative, and strategic
b. competitive, innovative, and visionary
c. visionary, strategic, and managerial
d. visionary, managerial, and competitive
Areas of risk to the entrepreneur include
a. career, family, psychic.
b. family, business, social.
c. psychic, social, physical.
d. financial, product, market
Which of the following steps should be carried out last, when deciding to sell a
business?
a. Publicize the offer to sell.
b. Segregate the assets.
c. Time the sale appropriately.
d. Prepare a financial analysis.
A market is
a. a group of consumers who have purchasing power and unsatisfied needs
b. a way of gaining consumer data
c. a segment of the economy
d. a group of known purchasers
Which of the following is an event that would require an entrepreneur to step aside and
let someone else direct the operation?
a. nonterminal physical incapacitation
b. divorce
c. age
d. disagreements with children or business partners
Team building
a. involves including qualified people in the venture.
b. does not threaten the entrepreneur’s autonomy.
c. does nothing.
d. is overrated.
Loan proceeds are not directly tied to
a. sales revenue.
b. expenses.
c. meeting cash flow problems.
d. planned expansion of a firm.
The entrepreneurial strategy matrix measures:
a. risk and security.
b. commitment and time.
c. risk and innovation.
d. opportunity and time.
The two most important aspects of creativity are
a. design and solution.
b. intelligence and technical competence.
c. process and people.
d. capital and opportunity.
Every person has the _____ and _____ to pursue a career as an entrepreneur
a. stubbornness; stupidity
b. potential; free choice
c. rights; regulations
d. obligation; duty
Sales and earnings of a venture are projected from
a. historical projections
b. historical financials
c. data on start-ups
d. property values
In starting or buying a new business, the higher the rewards, the
a. the more minimal the risk.
b. greater the risk.
c. greater the size of a business.
d. smaller the enjoyment.
Using the failure prediction model discussed in the chapter, the risk of failure can be
reduced by:
a. using less debt as initial financing and generating revenue in the initial stages.
b. using more debt as initial financing and generating less revenue in the initial stages.
c. using more revenue to enhance more debt in the initial stage.
d. all of the above.
Which of the following would be most commonly used for medium-term financing?
a. insurance companies
b. trade credit
c. finance companies
d. leasing companies
A common human resource problem is
a. poor relationships with parent companies and venture capitalists.
b. incompetent support professionals.
c. inflated owner ego.
d. incompetent workforce.
Generally, entrepreneurial stress is due to
a. being surrounded by incompetents.
b. fear of failure.
c. the discrepancy between the entrepreneur’s expectations and the ability to meet
demands.
d. caused by a big ego.
Emotional bias is likely to have what effect on a seller’s valuation of a business?
a. increase the valuation
b. decrease the valuation
c. have no net effect on the valuation
d. none of the above
Background or knowledge accumulation is the second phase of the creative process.
It often is possible to obtain more capital and a better range of skills in a sole
proprietorship than in a partnership.
Straight bankruptcy is often called liquidation.
The object of a patent is to provide the holder with a temporary monopoly on his or her
innovation.
A competitor’s move to increase market share can be a precipitative event in corporate
entrepreneurship.