Large firms like Apple, Facebook, General Electric, and Microsoft, that trade on
organized stock exchanges, are ________.
A) limited partnerships
B) limited liability companies
C) subchapter S corporations
D) C corporations
E) general partnerships
Answer:
Which of the following statements is not true regarding new product development?
A) New product development involves designing, producing, and selling new products
as a means of increasing firm revenues and profits.
B) When new product development is properly executed, there is tremendous upside
potential.
C) The key to successful new product development strategy is to develop products that
aren’t simply “me-too” products.
D) In general, developing new products is a low-risk strategy.
E) In many fast-paced industries, new product development is a competitive necessity.
Answer:
________ means that as a firm grows and adds personnel, the new hires typically do not
have the same ownership incentives as the original founders, so the new hires may not
be as motivated as the founders to put in long hours or may even try to avoid hard work.
A) Difficult selection
B) Adverse hazard
C) Ethical selection
D) Productivity hazard
E) Moral hazard
Answer:
Which of the following is an accurate characterization of interest in entrepreneurship?
A) There is minimal interest in entrepreneurship across the world.
B) There is minimal interest in entrepreneurship in North America and Europe, but
significant interest in Asia and Australia.
C) There is significant interest in entrepreneurship in North America and Europe, but
minimal interest in Asia and Australia.
D) While interest in entrepreneurship was once high, it is waning in popularity across
the world.
E) There is tremendous interest in entrepreneurship across the world.
Answer:
A board of directors’ three formal responsibilities are to ________.
A) periodically update the firm’s business plan, declare dividends, and write the firm’s
marketing plan
B) appoint the officers of the firm, declare dividends, and oversee the affairs of the
corporation
C) write the firm’s strategic plan, declare dividends, and conduct the annual meeting
D) appoint the officers of the firm, conduct the annual meeting, and submit the firm’s
annual report to the Securities & Exchange Commission
E) provide funding to the firm, write the firm’s strategic plan, and submit the firm’s
annual report to the Securities & Exchange Commission
Answer:
________ is a financial transaction whereby a business sells its accounts receivable to a
third party at a discount in exchange for cash.
A) Factoring
B) Vendor credit
C) Peer-to-peer lending
D) Crowdfunding
E) Leasing
Answer:
Calvin Tucker is in the process of launching an educational services firm. He plans to
incorporate the firm. Because the firm will be incorporated, Calvin is legally required to
have a ________.
A) board of investors
B) board of advisors
C) customer advisory board
D) board of directors
E) panel of advisors and peers
Answer:
Brad Jones is in the process of opening an electronics supply company and is working
on the portion of his business plan template that describes how he will deliver his
products and services to his customers. The portion of the business plan template that
Brad is working on is referred to as ________.
A) channels
B) network
C) linkages
D) grids
E) conduits
Answer:
Susan Howard owns a seafood restaurant in Naples, Florida. She is currently owed
$21,000 by a corporation that she catered a series of meetings for and $3,000 on an
overdue account. Amanda has $24,000 in ________.
A) accounts receivable
B) inventory
C) accounts collectable
D) accounts obtainable
E) accounts payable
Answer:
Talking to industry experts, obtaining feedback from prospective customers, and
administering surveys are examples of ________ research.
A) primary
B) secondary
C) derivative
D) principal
E) fundamental
Answer:
The sole entity responsible for granting patents in the United States is the ________.
A) U.S. Patent and Trademark Office
B) Federal Patent, Copyright and Trademark Office
C) Securities and Exchange Commission
D) U.S. Department of Patents
E) U.S. Treasury Department
Answer:
Three commonly utilized methods for determining product/service demand are
________.
A) assessing the overall financial attractiveness of the proposed venture, talking
face-to-face with potential customers, and assessing industry attractiveness
B) analyzing the financial performance of other businesses, talking face-to-face with
potential customers, and assessing target market attractiveness
C) assessing target market attractiveness; utilizing online tools, such as Google
AdWords and landing pages; and calculating total startup cash needed
D) assessing industry attractiveness; library, Internet and gumshoe research; and talking
face-to-face with friends and family
E) talking face-to-face with potential customers; utilizing online tools, such as Google
AdWords and landing pages; and library, Internet and gumshoe research
Answer:
Two years ago, Cameron Jones and Mary Scott each owned a small chain of smoothie
restaurants in New York City. Just recently, they decided to pool their interests and
combine their individual chains of restaurants into one chain. What Cameron and Mary
did with their firms is called a(n) ________.
A) licensing agreement
B) strategic alliance
C) acquisition
D) joint venture
E) merger
Answer:
Dell for computers, Modcloth for vintage and vintage-inspired women’s clothing, and
Proactiv for acne medication are examples of ________.
A) certifications
B) copyrights
C) patents
D) trade secrets
E) trademarks
Answer:
A financial statement is a(n) ________.
A) set of ratios which depict relationships between a firm’s financial items
B) estimate of a firm’s future income and expenses
C) hybrid statement of cash flows
D) itemized forecast of a company’s income, expenses, and capital needs
E) written report that quantitatively describes a firm’s financial health
Answer:
The Partnering for Success feature in Chapter 8 focuses on buying groups, and
recommends that small businesses seek out buying groups to participate in. What is a
“buying group” in the context of the feature?
A) A partnership that bands small businesses together to attain volume discounts on
common products and services that they buy
B) A partnership that bands small businesses together to collectively make the
commitment to “buy local” at every available opportunity
C) A partnership that bands small businesses together to get the best prices possible
from foreign importers and manufacturers
D) A partnership that bands small businesses together to get the best possible terms
from finance companies
E) A partnership that bands small businesses together to get the best possible rates on
property and liability insurance
Answer:
Which financial statement records all of a firm’s revenues and expenses for a given
period and shows whether the firm is making a profit or experiencing a loss?
A) Balance sheet
B) Owner’s equity statement
C) Statement of cash flows
D) Forecast
E) Income statement
Answer:
Which of the following is not one of the major sources of barriers to entry?
A) Product differentiation
B) Capital requirements
C) Buyer group concentration
D) Access to distribution channels
E) Government and legal barriers
Answer:
A(n) ________ is the pooling of interests to combine two or more firms into one. A(n)
________ is the outright purchase of one firm by another.
A) acquisition; merger
B) merger; acquisition
C) licensing agreement; acquisition
D) joint venture; strategic alliance
E) strategic alliance; joint venture
Answer:
Next Big Sound, the company profiled in the opening feature of Chapter 9, is a music
analytics company. Which of the following statements in incorrect regarding Next Big
Sound’s co-founders, its personnel policies or the company itself?
A) Next Big Sound has three co-founders.
B) The co-founders have healthy debates, but are able to come to consensus and get
along and trust one another.
C) Because the co-founders could not agree who would be the company’s CEO, the
three share the title of co-CEOs.
D) The idea for Next Big Sound was created at a Startup Weekend event in San
Francisco.
E) The firm is in located in New York, New York.
Answer:
According to the textbook, the first step in a competitor analysis is to ________.
A) develop a marketing plan
B) develop the strategic plan
C) study the strength of the industry
D) study the external environment
E) determine who the competition is
Answer:
Which form of intellectual property protection is the only one expressly mentioned in
the original articles of the U.S. Constitution?
A) Assurances
B) Patents
C) Copyrights
D) Trade secrets
E) Trademarks
Answer:
________ costs are costs that a company incurs whether it sells something or not.
________ costs are the costs a company incurs as it generates sales.
A) Preset; Marginal
B) Variable; Fixed
C) Set; Marginal
D) Fixed; Variable
E) Marginal; Set
Answer:
Tracy Brady is in the process of developing an exciting new product in the smartphone
industry. She’d like to show a preliminary description of the product to industry experts
and prospective customers to solicit their feedback. Tracy should complete and
distribute a(n) ________ statement.
A) perception
B) usability
C) early adopter
D) concept
E) adoption risk-reward
Answer:
The Savvy Entrepreneurial Firm feature in Chapter 9 focuses on how business founders
overcome a lack of business experience. Which of the following was not mentioned as a
practical way for a new business founder to overcome a lack of business experience?
A) Hiring consultants from a major consulting firm (e.g., Bain & Company or
McKinsey & Company)
B) Taking on a partner that has business experience
C) Getting help from a Small Business Development Center
D) Joining a Meetup group
E) Participating in online forums
Answer:
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
Answer:
________ marks are trademarks or service marks used by the members of a
cooperative, association, or other collective group, including marks indicating
membership in a union or similar organization.
A) Collective
B) Share
C) Examination
D) Joint
E) Certification
Answer:
Franchising is a form of business ownership in which a firm that already has a
successful product or service licenses its trademark and method of doing business to
another business in exchange for ________.
A) an initial franchise fee and an ongoing royalty
B) a one-time franchise fee
C) an equity position in the new business
D) an ongoing royalty
E) an initial franchise fee and an equity position in the new business
Answer:
A(n) ________ is a written document that deals with issues such as the relative split of
the equity among the founders of the firm, how individual founders will be
compensated for the cash or the ‘sweat equity” they put into the firm, and how long the
founder will have to remain with the firm for their shares to fully vest.
A) entrepreneurs’ agreement
B) creators’ agreement
C) founders’ agreement
D) initiators’ agreement
E) originators’ agreement
Answer:
In ________-based pricing, the list price of an item is determined by adding a markup
percentage to a product’s cost.
A) cost
B) compliance
C) value
D) competitive
E) economic
Answer:
Shawn Jones was reading the business plan of New Venture Fitness Drinks, and noticed
that prior to its financial forecasts, New Venture Fitness Drinks placed an explanation of
the sources of the numbers for the forecast and the assumptions used to generate them.
This explanation is called a(n) ________.
A) forecast sheet
B) forecast hypothesis
C) estimate statement
D) assumption sheet
E) hypothesis sheet
Answer:
________ financial statements reflect past performance and are usually prepared on a
quarterly and annual basis.
A) Chronological
B) Ad-hoc
C) Historical
D) Concurrent
E) Pro forma
Answer: