Which of the following statements is true of business plans?
A. Firms without a business plan are less likely to close down than firms with plans.
B. External legitimacy for a firm is best established by creating business plans.
C. Typically, the higher-performing firms in any industry tend to be those who do not
have any business plan.
D. Having a business plan guarantees higher profits.
Which of the following sections of a classic business plan mentions the legal and
hierarchical structures, key personnel, related service providers, and business location?
A. The market
B. The organization
C. The appendixes
D. The financials
Ivory Isles Resort sets a low base price of $250 for its rooms. This appears to be a great
bargain for vacationers looking for resorts in the 5-star segment. However, the
customers have to pay additional charges for using services such as the casino, spa, hot
pool, gym, and the lounge. According to this information, which of the following
pricing strategies is used by Ivory Isles?
A. Captive pricing
B. Odd-even pricing
C. Going-rate pricing
D. Multipack pricing
Which of the following statements is true of legitimacy indicators?
A. A small business cannot survive without incorporating all the 30 characteristics of
the three types of legitimacy indicators.
B. Part of legitimacy and building trust for a firm comes from changing the legitimacy
characteristics frequently.
C. It is easy for businesses to incorporate all the elements of the different types of
legitimacy indicators.
D. Repeating one legitimacy characteristic daily does more to build social capital than
changing the legitimacy characteristics.
A(n) _____ is a middleman business which buys and sells to businesses rather than
consumers.
A. manufacturer
B. agent
C. wholesaler
D. retailer
While closing a sales call, when a sales person says “I’ll just need your credit card for
payment,” he is using the sales closing technique of _____.
A. try-before-you-buy close
B. assumptive close
C. chances-are close
D. urgency close
A good marketing strategy is most likely to focus on:
A. the legal and organization structure of the firm.
B. the sales plan that shows specific ways to secure sales from customers.
C. the financial reports and projections.
D. the vision and mission statement of the business.
A(n) _____ plan is a document designed to detail the major characteristics of a firm-its
product or service, its industry, its market, its manner of operating and its financial
outcomes with an emphasis on the firm’s present and future.
A. screening
B. informational
C. invention
D. business
The CEO at River Castle Inc. asked the employees to prepare a report on ways in which
the company could become more environmental friendly. The reports revealed areas in
which the company had been unnecessarily adding to its carbon footprint and
consuming excessive energy due to faulty machines. As a corrective action, all the
faulty and outdated equipment were replaced with efficient equipment. This is an
example of a(n) _____.
A. arraignment
B. green audit
C. positive feedback
D. bootstrap paradox
Private businesses that are authorized to make SBA insured loans to start-ups and small
businesses are called _____.
A. community development organizations
B. accelerators
C. small business investment companies
D. LLCs
_____ analysis is based on the concept that the longer you have to wait to receive
money, the less valuable it is right now.
A. Discounted cash flow
B. Replacement value cash flow
C. Free cash flow
D. Book value cash flow
Which of the following represents an advantage of the consignment approach?
A. Full-time sales with only a part-time involvement from a person
B. High potential for competing offers
C. Less amount of time before payout
D. Complete lack of inventory
The _____ phase is usually the most difficult time a person will have in business.
A. start-up
B. maturity
C. growth
D. evaluation
Which of the following ways does borrowing help increase potential profits?
A. By increasing the weighted average cost (WAC) of the business
B. By allowing less debt to be included in the capital mix
C. By providing capital funds for additional business opportunities
D. By increasing the cost of capital of the business
Which of the following is the best example for random discounting?
A. Christmas sale
B. Back-to-school sale
C. Happy hours in movies
D. Sale on select merchandise
The weighted average cost (WAC) refers to:
A. a legal reduction in taxes by the government.
B. the average equity capital costs incurred by a firm per year.
C. the percentage cost of obtaining future funds.
D. the expected average future cost of funds.
Formal summaries of the content of an accounting system’s records of transactions are
called _____.
A. financial securities
B. financial instruments
C. financial statements
D. financial derivatives
The goal of a feasibility study is:
A. to create additional value for customers through great products or services.
B. to create outlets for employees to bring out new ideas.
C. to assess if a business idea can be profitably brought to market.
D. to assess how well a preliminary run of a business works and what problems it might
have.