Promotional funds are determined according to past experience in which of the
following methods?
a. Spending as much as the competition
b. What can be spared
c. Percentage of sales
d. Forecasted industry standard
Which of the following is a legal basis for selecting employees?
a. Gender
b. Age
c. Education
d. Disabilities
Customer objections can be categorized as relating to
a. product and price.
b. need and sequence.
c. source and pitch.
d. timing and sequence.
E-commerce innovators
a. have an extra edge in defining and developing a market.
b. automatically have a monopoly on success.
c. are few and far between.
d. are almost all out of business today.
Which of the following family members are less frequently involved in family
businesses in the United States?
a. in-laws
b. parents
c. spouses
d. siblings
Creators Plus, a modest-size manufacturer of quality crafts, expends considerable
resources to ensure that its products are created in the most efficient manner. According
to the owner, distribution and promotion are secondary considerations to managing an
expedient production process. Creators Plus subscribes to the _______ marketing
philosophy.
a. process-oriented
b. market-oriented
c. sales-oriented
d. production-oriented
The major distinction between the cash method and the accrual method of accounting is
that the
a. cash method is easier to use.
b. cash method matches revenue and expenses better.
c. point at which a firm reports revenue and expenses is different.
d. cash method involves less record keeping.
An increase in assets on the balance sheet will result in
a. an increase in ownership equity or outstanding debt.
b. a decrease in ownership equity or outstanding debt.
c. a decrease in ownership equity and an increase in outstanding debt.
d. an increase in ownership equity and a decrease in outstanding debt.
In practice, a minimum acceptable rate of return on investment is usually based on
a. industry average.
b. outside investors’ stated requirements.
c. auditors’ stated requirements.
d. past experience.
A camera hobbyist starts a photographic supplies store. The most obvious reward for
this entrepreneur is the opportunity to
a. serve other photography enthusiasts.
b. experience personal fulfillment.
c. be independent.
d. work with people.
One of the ways that a company can promote its online business is by
a. placing banner ads on its site.
b. offering rebates that can be applied toward future purchases on the site.
c. making sure that the Web site is accessed by Internet search engines.
d. germ marketing.
If a firm finances with equity rather than debt, net income will be greater because
a. equity financing almost always leads to better firm performance than debt financing.
b. the terms of equity financing are more stable than the terms of debt financing.
c. this impacts asset selection for the better.
d. there is no interest expense.
U.S. businesses have recently shifted their focus toward a _____ orientation.
a. market
b. consumer
c. production
d. sales
The preferred method of determining promotional expenditures is
a. percentage of sales.
b. what it will take to do the job.
c. cost plus.
d. what can be spared.
According to a study by the National Federation of Independent Business Foundation,
new product ideas for small business startups originate from all of the following except
a. prior work experience.
b. personal interests and hobbies.
c. a chance happening.
d. existing records of a business.
Only large firms have the resources to do marketing research. This statement is
a. more true than false.
b. a myth.
c. well founded.
d. based on recent research findings.
Discounted cash flow techniques answer which of the following questions?
a. How much average profit is generated per dollar of average investment?
b. Do the cash returns of the investment exceed the cash outlays?
c. How long will it take to recover the original investment outlay?
d. How does the present value of future benefits from the investment compare to the
investment outlay?
Calculate the annual interest rate associated with each of the following terms: (a) 2/5,
net 30, (b) 2/10, net 20, and (c) 3/15, net 30.
Which of the following does not increase or decrease cash flows from assets?
a. The firm’s after-tax cash flows from operations
b. Changes in working capital
c. Changes in personal income tax regulations
d. Changes in fixed assets and other long-term assets
Major steps in a formal, comprehensive credit management system for a small business
include all of the following except
a. aging accounts receivable.
b. evaluating the credit of applicants.
c. establishing effective billing and collection procedures.
d. maintaining the credit history of customers to whom credit is extended.
In terms of willingness to assume risks, entrepreneurs show
a. low risk-taking propensity.
b. moderate risk-taking propensity.
c. high risk-taking propensity.
d. extremely high risk-taking propensity.
Which of the following is one of the basic promotional methods?
a. Advertising
b. Provisional selling
c. Sales enhancement
d. Expansive communication
Customers who avoid doing business online are often reluctant to do this because
a. they have had a bad online purchase experience in the past.
b. it is difficult to predict how much time it will take to ship the product.
c. Web sites are difficult to navigate.
d. they are reluctant to purchase a product without first seeing it.
Even though it is available, Bob never purchases bottled water when he is thirsty. Bob’s
behavior indicates that bottled water
a. does not meet Bob’s evaluative criteria.
b. increases Bob’s cognitive dissonance.
c. is not included in Bob’s evoked set.
d. decreases Bob’s perceptual categorization.
Post-harvest entrepreneurs may become disillusioned when they realize their sense of
identity
a. was associated with the quest for wealth.
b. derived from interactions with employees.
c. was intertwined with their business.
d. does not return after joining in social or charitable work.
John Keeler is a prospective entrepreneur who has just presented his business plan to a
venture capitalist, enthusiastically pointing out the unique features of a new invention
he is promoting. The most likely question in the venture capitalist’s mind is:
a. How strong is the patent protection?
b. How costly will it be to produce the product?
c. What is the demand for the product?
d. What management skills does this venture have?
A stockholder in a Subchapter S corporation
a. is not allowed to vote in elections to choose members of the S corporation’s board of
directors.
b. cannot vote by proxy at stockholders’ meetings.
c. cannot become a member of the board of directors.
d. cannot be a nonresident alien.
Which of the following is a criteria used to judge whether a new business idea is a good
investment opportunity?
a. The market need is defined so clearly that timing of introduction is unimportant.
b. The proposed business can achieve a durable or sustainable competitive advantage.
c. The return on investment must be just high enough to allow for errors and mistakes.
d. The opportunity must be financially rewarding, regardless of the entrepreneur’s
abilities.
Forecasting sales for a new venture
a. is simplified because the firm’s product or service offerings are focused on one or a
few areas.
b. should always be done with the assistance of outside consultants.
c. is extremely difficult.
d. is not all that important to the future operation of the firm.
A _____ is defined as a group of customers or potential customers who have purchasing
power and unsatisfied needs.
a. consumer segment
b. target market
c. market
d. consumer market
A prospective entrepreneur wants to find a career doing what she enjoys most-designing
and selling clothing. She might be drawn to try an entrepreneurial venture in order to
realize
a. personal fulfillment.
b. substantial long-term profits.
c. freedom from control of a managerial hierarchy.
d. a sense of self-esteem as a result of building her own business.
As a firm grows, it experiences pressure to formalize its personnel policies and
procedures.
A firm engages in outsourcing only when it procures components from outside the
home country.
Zane’s Cycles in Branford, Connecticut lost its competitive advantage when it changed
its broad-based market strategy to one that focused on a market segment that turned out
to be too small to sustain the firm.
Explain the nature and purpose of the executive summary part of a business plan.
Pro forma financial statements reflect the past financial performance of a firm.
What are the four conditions under which a segmented market can erode?
Analysis of competitors’ channels is a valuable source of information to a small
business that is structuring its own distribution system.
Sound pricing practices begin with knowing product costs.
Total asset turnover is a measure of the effectiveness of a firm’s credit policies.
Explain the concept of coinsurance, as found in some commercial property policies.
Packaging is a significant tool for increasing the value of the total product by creating a
distinctive impression.
The most appropriate way for a family firm to deal with younger family members
whose abilities are untested is to adopt a policy of “no jobs in the business until you
own at least 10 percent.”
Some entrepreneurs have found an active board of directors to be both practical and
beneficial.
A small business owner can calculate the interest expense of the company for each year
by multiplying the interest rate by the amount of debt outstanding.
A cash budget is concerned only with transactions that directly affect cash.
International dissimilarities in language and culture, business practices, and government
regulations are fading over time.
The goodwill gained from benefiting the community may be worth more than it costs.
If a firm finances with equity rather than with debt, it will bear no interest expense and
thus yield greater net income.
New versions of B2B e-commerce models continue to develop and evolve.