When considering management, the entrepreneur should be concerned about
a. ownership positions.
b. pension and profit sharing.
c. total number of employees.
d. employee benefits.
Which of the following is not a suggestion a tax accountant or lawyer might make
concerning tax reduction?
a. Place real estate in a separate corporation.
b. Increase management’s salaries and fringe benefits.
c. Establish a leasing subsidiary.
d. Give some or all of the owner’s shares to heirs.
Which is not a start-up expense?
a. Rent
b. Advertising
c. Supplies
d. Depreciation
Which of the following is not a key factor affecting a marketing information system?
a. size of the system
b. usefulness or understandability of data
c. timeliness of the reporting system
d. relevancy of data
One of the external problems new ventures face is
a. vandalism
b. poor labor force
c. government regulations
d. market knowledge
Specific factors of a venture being offered for sale that should be examined include
a. age, trends, and future.
b. profits, sales, and operating ratios.
c. employees, suppliers, and competitors.
d. profits, price, product.
In the production budget for a manufacturing firm, the number of units needed in
inventory is determined by
a. the sum of beginning inventory and expected sales.
b. the sum of the desired ending inventory and the number of units to be sold.
c. the sum of beginning inventory and the desired ending inventory.
d. an inventory model.
If cash flow is deemed the most important consideration in buying a business, which
valuation method is likely to be used?
a. adjusted tangible book value
b. price/earnings ratio
c. high equity/low debt
d. discounted earnings
In many ways, an I-Team is
a. a small business operating within a large business
b. a small business integrated within other parts of the firm
c. a large business operating within a large business
d. a partnership operating within a small business
The primary advantage of the price/earnings approach to valuation is that
a. it reflects ‘top value’ of the firm.
b. it pays off assets and sells liabilities.
c. it assumes business begins operations.
d. it is simple to use.
The last step in preparing the operating budget is to
a. estimate current sales.
b. estimate operating expenses.
c. estimate variable costs.
d. estimate R & D costs.
Which of the following does not apply to the strategic formulation school of thought?
a. unique people
b. unique places
c. unique markets
d. unique products
Which is an important question for the entrepreneur to ask when evaluating the venture
capitalist?
a. Is the person someone with whom the entrepreneur can work?
b. Is the person a close relative?
c. Is the person wealthy?
d. Is the person a college graduate?
Which of the following statements best describes a ‘gazelle?’
a. a business with at least 20 percent growth every year
b. a business with no sales growth
c. a business that has acquired numerous firms
d. an inventor who turned business person
According to the U.S. Patent Office, the process of obtaining a patent takes how many
months?
a. about 24 months
b. about 36 months
c. about 48 months
d. about 60 months
The major thrust of the business plan, as defined in the textbook, is
a. to provide a working document for the venture.
b. to encapsulate the strategic development of the project in a comprehensive document.
c. to serve as a communication tool for the entrepreneur.
d. to outline capital needs for the new venture.
Formal planning can be divided into strategic and nonstrategic.
Thanks to the North American Free Trade Agreement, among the largest U.S. trading
partners are China and Brazil.
Explain three major reasons why new ventures fail.
A feasibility criteria approach focuses strictly on the financial feasibility of a new
venture.
Peter Drucker has stated that successful innovators must look, ask, and listen.
Creative talents can be improved through practice and awareness of habits that can
cause problems. However, there are ways to increase creativity; one area is to recognize
relationships. Explain what is meant by this.
The most common sources of debt financing are commercial banks.
Entrepreneurs always know that they as individuals must remain less important than the
venture.