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When two small businesses in the target nation form an alliance, they have formed a
foreign joint venture.
In the checkout process, the site should include a progress indicator on each checkout
page and provide a link back to the items in the customers' shopping cart.
An important first step in protecting the small business from bad debt losses is a
detailed credit application.
Financial ratios are a common tool used by over 50% of small business owners in the
daily management of their businesses.
Small companies are at a definite disadvantage compared to larger ones when it comes
to conducting market research since it is so expensive.
Entrepreneurs are more wild risk takers than calculated risk takers.
Because of radio's nearly universal presence, advertising messages receive a
tremendous amount of exposure in the target market.
For the typical small business owner, price is always a substantial factor when
purchasing inventory and supplies.
In an "F.O.B. seller" (shipment) contract, both title and risk of loss transfer to the buyer
when the seller delivers the goods to the carrier or shipper.
One of the characteristics that investment bankers who underwrite public stock
offerings typically look for is consistently high growth rates.
The law requires franchisors to register a Franchise Disclosure Document (FDD) and
deliver a copy to prospective franchisees after the sale of a franchise.
To estimate a firm's cash balance for each month, the owner must first wait until the end
of the month.
Silent partners are active in a business but generally are known to be members of the
partnership.
The reality test of a business plan is the explanation of how much of a return is
expected, and when investors can expect it.
The most common method of creating a projected income statement is to develop a
sales forecast and then "work down" to the bottom line.
A firm whose sales volume is expanding rapidly need not be concerned about managing
its cash flow.
A foreign corporation is one chartered in a foreign country.
Bylaws are the rules and regulations the officers and directors establish for the
corporation's internal management and operation.
Succession planning should begin when the children reach college age.
Insurance coverage is an example of risk transfer.
For a service firm, labor and materials comprise the largest portion of the cost of the
service provided.
After a company's strengths and weakness are assessed, the strategic planning process
should identify opportunities and threats facing the company and should isolate the key
factors for success in the business.
The opportunity to reap unlimited profits is the primary motivator for most
entrepreneurs.
Businesses with less than 50 employees are not subject to ADA and therefore may deal
with HIV-positive and AIDS-infected employees without fear of government action.
In franchising, royalties are paid by the franchisee to the franchisor.
When selecting a city, a small business owner needs to ask questions about the wage
rates, the business climate, and proximity to markets and raw materials, in order to
properly analyze the city.
Before deciding to use credit as a competitive weapon, small business owners must
make sure that the firm's cash position is strong enough to support additional pressure.
"Zapping" provides a great advantage to TV advertisers.
For many entrepreneurs, the key barrier is not knowing where or how to start an
e-commerce effort, while for others cost concerns are a major issue.
To overcome myopic thinking, creative companies include nonexperts in creative
problem solving or idea generation sessions.
One way to get a mutually satisfying deal when negotiating is to recognize and try to
meet the other party's need(s).
Point-of-sale systems can be programmed to alert the business owner when key items
drop below the reorder point.
The biggest challenge facing the growth of new franchises is:
A) the lack of capital.
B) competition from independent entrepreneurs.
C) market saturation.
D) the recent downturn in the economy.
The mechanics of most small business sales involve:
A) a cash buyout with no financing.
B) a down payment with a note carried by the seller.
C) no down payment with a note carried by the seller.
D) an exchange of one company's stock for another, and stock options for senior
managers.
One of the things that underwriters look for in a company that wants to go public is:
A) presence in a mature industry.
B) filing fees with the SEC.
C) strong bankers.
D) a clear organizational structure.
Tom is working on a pricing strategy for his company's new product line. In order to
determine the price ceiling for these products, Tom needs to know:
A) what price range will work best.
B) what his company's cost structures are.
C) what his customers are willing to pay.
D) what his competitors are charging.
The most commonly used pricing technique for manufacturers is:
A) direct pricing.
B) margin pricing.
C) cost-plus.
D) absorption pricing.
A periodic physical inventory count:
A) is not necessary if the business owner uses a perpetual inventory control system or
has a computerized point of sale (POS) terminal.
B) typically involves one employee and is done weekly.
C) allows the owner to evaluate the effectiveness and the accuracy of his/her inventory
control system.
D) is not necessary if the business owner uses an ABC inventory system.
Today's leader is different from leaders in the past in that he/she:
A) is now like an orchestra conductor, guiding the members through the proper use of
power.
B) is like a referee in a TV wrestling match, running about, yelling directions, and
keeping the organization's members from killing themselves.
C) is like the leader of a jazz band, guiding individual and group creativity and
innovation.
D) is in tight control of resources and authority but delegating responsibility and
opportunity.
Part-time entrepreneurship has an additional advantage over starting up a company
full-time in that:
A) it is a much lower risk for the entrepreneur.
B) it doesn't require a business plan.
C) the entrepreneur can change products and markets more easily.
D) the entrepreneur doesn't need to know the industry as well.
Marking down inventory items that don't sell will result in:
A) keeping the inventory lean.
B) reduction in inventory turn over ratio.
C) paying expenses on time.
D) All of the above
What is CVV or CVV2?
A) Customer tracking technology
B) Customer verification value
C) Credit verification value
D) Card verification value
The average interest rate on SBA-guaranteed loans is:
A) prime minus 2 percent.
B) 2 percent.
C) prime plus 2 percent.
D) 7 percent.
In evaluating an existing business, entrepreneurs should seek to answer several
questions, including:
A) Can financing be arranged?
B) What business broker should I use?
C) What industries will be "hot" in the future and is this business in one of them?
D) What legal aspects should be considered?
Managing diversity in the workforce means managers need to:
A) hire more minorities and fewer non-minorities.
B) create an environment in which all types of workers can flourish.
C) establish affirmative action programs.
D) strive for more homogeneity in the workforce.
Most venture capitalists look for:
A) competent management.
B) competitive edge.
C) companies in growth industries.
D) All of the above
When checking references, the small business owner:
A) can largely ignore the references of professional job candidates.
B) should also talk with previous employers, not just the references provided.
C) may only ask for confirmation of employment dates, job title, and salary
information.
D) is able to ask any question of the reference to find about things he/she could not ask
the candidate.
A few examples of small businesses giving back to the community are:
A) literacy programs.
B) food bank programs.
C) clean environment programs.
D) All of the above
________ is (are) said to link trading partners, whether they are giant corporations or
single individuals with a small business.
A) Technology
B) Better management
C) Higher salaries
D) Smaller organizations
A limited liability company is formed under:
A) a Certificate of Incorporation.
B) a Partnership Agreement.
C) Articles of Organization.
D) the Revised Uniform Partnership Act.
A ________ is a document the seller draws on the buyer, requiring the buyer to pay the
face amount (the purchase price of the goods) either on sight (a sight draft) or on a
specified date (a time draft) once the goods are shipped.
A) bank draft
B) letter of credit
C) COD
D) line of equity
A valuation method that is more realistic than the balance sheet because it adjusts book
value to reflect actual market value is the:
A) excess-earnings method.
B) market approach.
C) capitalization method.
D) adjusted balance sheet method.
Antonio is a limited partner and is neither active nor generally openly associated with
the firm. He is the ________ partner.
A) limited
B) secret
C) honorary
D) dormant
The creation of a safety team, conduct of a safety audit, and creation of a safety manual
are all techniques for controlling:
A) property and casualty insurance costs.
B) professional liability insurance costs.
C) health care insurance costs.
D) worker's compensation insurance costs.
Since 2001, the average IPO has raised ________ for the issuing company.
A) $310 million
B) $218 million
C) $478 million
D) $118 million
Strategic management is a process that involves:
A) developing a vendor list.
B) developing a vision and mission statement.
C) developing goals and objectives.
D) Both B and C
A form of inventory management used in manufacturing that stresses a harmonious
relationship with suppliers is:
A) CRM.
B) TQM.
C) efficient consumer response.
D) JIT II.
Which one of the following is a barrier to creativity?
A) Searching for the one "right" answer
B) Focusing on being "logical"
C) Blindly following the rules
D) All of the above
Brenda is starting her business by offering exclusive hand-bags. The desired image that
she should set for her handbags is "exclusive." She should set the price at:
A) discount.
B) bargain.
C) value.
D) upscale.
________ thinking is going from one logical conclusion to the next.
A) Vertical
B) Lateral
C) Simultaneous
D) Parallel
The strategic planning process for small businesses is:
A) market-focused.
B) the same as it is for a large company.
C) generally done by top management with little or no participation by employees.
D) product-focused and similar to that for large companies.
While working for iRobot, Jim Lynch came up with a new product while cleaning the
gutters on his house. Lynch is an example of a(n) ________.
A) entrepreneur
B) disruptor
C) intrapreneur
D) manager
This act was passed by Congress to supplement the Clayton Act, providing the power to
prevent "unfair methods of competition in commerce or unfair or deceptive acts in
commerce."
A) The Federal Trade Commission Act
B) The Sherman Act
C) The Robinson-Patman Act
D) The Miller-Tydings Act
________ discounts give customers an incentive to pay for merchandise promptly.
A) Trade
B) Quantity
C) Cash
D) Cumulative
In a Chapter 7 bankruptcy:
A) a small firm gets a second chance by being protected from creditors while a
reorganization plan is formulated.
B) every piece of property the bankrupt debtor owns is subject to court attachment.
C) loss is limited to $100,000 in unsecured debt and to $350,000 in secured debt.
D) a debtor simply declares all of his firm's debts, and turns all assets over to a trustee
who then sells and distributes them to settle both secured and unsecured debts.
A formal mentoring program should be established in ________, using both internal
and external people. As the successor develops his/her skills and performance, he/she
will transition to the next stage.
A) Stage I
B) Stage II
C) Stage III
D) Stage IV
There are a number of tips a small business owner can follow to build effective
advertising, including:
A) run one advertisement at a time.
B) limit the content of each ad.
C) focus on short-term advertising goals.
D) All of these
