Because private investors are willing to take greater risks than banks, they are more
willing to finance deals through private placements than are banks.
Spoilage, obsolescence, and pilferage are all part of the set-up costs of inventory.
The advantage of the EOQ with usage calculation is that it takes into consideration that
the inventory order does not arrive at the same time.
To be successful, a differentiation strategy must create the perception of value in the
customer’s eyes.
The break-even analysis provides an opportunity for integrated analysis of sales
volume, expenses, income, and other relevant factors.
The Zip Code Atlas and Market Planner provide detailed information on sales,
spendable income, etc., by census region, county, and city.
The trend in corporate downsizing and the resulting trust gap have spawned both the
“corporate castoff” and the “corporate dropout.”
The three biggest domestic barriers to exporting facing small businesses are the
appropriateness of the product, political and cultural information, and finding a suitable
foreign agent to assist them.
Most letters of intent include a lock-up agreement.
Penetration refers to if a business introduces a product into a highly competitive market
in which a large number of similar products are competing for acceptance.
The longer a company’s cash flow cycle, the more likely it is to encounter a cash crisis.
The cash management role of “cash conserver,” controlling the cash needed to pay bills,
and prioritizing and timing those payments, is the entrepreneur’s first and foremost
responsibility.
A well-written business plan defines the company’s ________.
A) policies
B) procedures
C) routines
D) business model
Currency: inflation rate, availability, controls, stability of exchange rate; Balance of
payments; Per capita income and distribution; Disposable income and expenditure
patterns are components of:
A) demographic/physical environment.
B) social/cultural environment.
C) economic environment.
D) market access.
When negotiating the deal, the most important thing to remember is:
A) terms are more important than the price paid.
B) to negotiate the lowest possible price.
C) often the difference in available funds can be made up by collecting accounts
payable.
D) the owner of the business always asks 14-22% more than he/she is willing to take.
Which of the following is true about global competition?
A) There is less of a focus on quality and more of a focus on price internationally.
B) It makes companies more customer-focused.
C) It is largely the domain of small businesses due to their flexibility.
D) It tends to shorten the life cycle of a product or service.
Successful implementation of TQM involves:
A) modification in the operational culture.
B) work process.
C) Both A and B
D) Neither A nor B
Citicorp was found guilty of violating parking laws. Parking involves complex shifts of
funds between countries to avoid the payment of taxes. Citicorp maintained two sets of
financial records for a parking scheme. These actions violate which area of business
responsibility?
A) Investors
B) Consumers
C) Community
D) Product quality
Customers that sell small-ticket items frequently offer their customers:
A) discounts.
B) installment credit option.
C) “store value” cards.
D) trade credit.
An agreement between a business seller and the buyer, in which the seller agrees not to
open a competing business within a specific time period and geographic area, is called
a:
A) nondisclosure statement.
B) restrictive covenant.
C) bulk transfer.
D) letter of intent.
Asset-based financing:
A) is efficient since the small business borrows only the money it needs.
B) provides less borrowing capacity than inventory-based financing.
C) is more expensive than other types of financing.
D) is less desirable than inventory-only deals to bankers.
The ________ ratio is a conservative measure of a firm’s liquidity and shows the extent
to which a firm’s most liquid assets cover its current liabilities.
A) current
B) quick
C) turnover
D) net profit
Answering the question “What business am I in?” defines the company’s:
A) mission.
B) assessment of its own strengths and weaknesses.
C) external opportunities and threats.
D) goals and objectives.
The price floor is established:
A) by the firm’s total cost.
B) by the consumers.
C) by the government.
D) None of the above
The small business gains what advantage by selling on consignment?
A) Shorter lead time when reordering than with standard contracts
B) Better customer service
C) Not bearing the risk of loss for the consigned goods
D) Receiving absolute title to the goods prior to paying for them
A ________ strategy tends to be ideally suited to the small business.
A) differentiation
B) focus
C) cost leadership
D) product quality
Which brain takes care of the body’s emotional, intuitive, and spatial functions?
A) Left
B) Right
C) Front
D) Back
Focusing on the “________” uses of a product or service limits creativity.
A) unconventional
B) innovative
C) traditional
D) unorthodox
Deming’s 14 Points include:
A) awarding business to suppliers on the basis of the best price.
B) correcting defects at the end of the production process.
C) establishing production quotas.
D) adopting a total quality philosophy.
________ is (are) one of the trading intermediaries a small company can use to enter
the global marketplace.
A) Export merchants
B) Joint ventures
C) International franchising
D) Establishing international locations
The ________ method of inventory control is the least effective for ensuring accuracy
and reliability and often leads to stockouts.
A) perpetual
B) ABC
C) partial
D) visual
McDonald’s is an example of a ________ franchise.
A) conversion
B) trade name
C) product distribution
D) pure
A ________ is a grant giving the inventor of a product the exclusive right to make, use,
or sell it for a specific time.
A) patent
B) copyright
C) trademark
D) warranty
When a bank makes enough good SBA-guaranteed loans to become a ________ lender,
the SBA promises a faster turnaround time for the loan decisiontypically 3 to 10
business days.
A) preferred
B) qualified
C) certified
D) LDC
The primary human elements on which successful JIT systems are built are:
A) mutual trust and teamwork & productivity.
B) mutual trust and teamwork and empowerment.
C) lower labor cost and productivity.
D) high profit and lower labor cost.
In a(n) ________, a company raises capital by selling shares of its stock to the general
public for the first time.
A) angel offering
B) secondary offering
C) venture capital sale
D) IPO
Wanda is an American manager with a U.S. firm in Japan. Wanda is having difficulty
“conducting business.” When invited to play golf she attempts to talk business, but her
Japanese hosts gently refuse. When she meets a new corporate customer, she tries to get
“right down to business” to show respect for their time, but they insist on talking about
non-business matters for several meetings. Wanda is experiencing what international
barrier to doing business?
A) Cultural
B) Political
C) Domestic
D) Non-tariff
________ are the various groups and individuals who affect and are affected by a
business.
A) Consequentialists
B) Workers
C) Stakeholders
D) Objectivists
Once a small business has established a firm written credit policy and communicated it,
the next step in building an effective credit policy is to:
A) send invoices promptly.
B) determine what percentage of sales is being written off as bad debt.
C) create a simple credit application.
D) create a “tracking file” of events.
Often, ideas require a ________ period.
A) investigation
B) verification
C) gestation
D) preparation
Asset-based borrowing permits small businesses:
A) to borrow up to 100% of the value of their inventory or their accounts receivable for
the money they need for long-term goals.
B) to use normally unproductive assetsaccounts receivable and inventory.
C) to obtain loans more easily but with less borrowing power than if they used an
unsecured line of credit.
D) access to a source of funds ideally suited for long-term financing needs.
One of the myths of e-commerce is that:
A) setting up a business on the Web is easy.
B) setting up a business on the Web is inexpensive.
C) setting up a business on the Web is impossible.
D) Both A and B