Decisions based on assumptions are bound to be flawless.
Generation X, made up of those people born between 1965 and 1980, is the most
entrepreneurial generation in history.
One advantage of the excess-earnings method is that it offers an estimate of goodwill.
Most states do not require a Certificate of Incorporation or a charter to be filed.
Relatively few consumer goods use the manufacturer-to-retailer-to-consumer
distribution channel.
Under the Code, as long as an offeree’s response indicates a sincere willingness to
accept, it will be an acceptance although the terms of the acceptance may be somewhat
different.
The sole proprietorship has the least ability to accumulate capital.
You should never keep your decision as to your successor a secret.
Online merchants must recognize that customer service is just as important (if not more
so) on the Web as it is in traditional brick-and-mortar stores.
The 80/20 rule states that 80% of each sales dollar should be spent on purchases, and
the remaining 20% should go towards covering costs and making a profit.
Loans from a stockbrokerage on the small business owner’s portfolio can be “called” to
be paid within a matter of days or even hours.
Because installment credit is so profitable for the small business, most small businesses
finance themselves.
The United States Supreme Court changed the nature of an employer’s liability for
sexual harassment, rejecting the previous standard that the employer had to be negligent
somehow to be liable for a supervisor’s improper behavior toward employees.
The U.S. Census Department’s “TIGER” file is a computerized map of the entire United
States that gives entrepreneurs the power to pinpoint existing and potential customers.
For a new owner of an existing business, physical facilities and equipment costs are
very similar to what would have been spent on a start-up with all new facilities and
equipment.
Another important measure of Web success is the conversion (or browse-to-buy) ratio,
which measures the proportion of visitors to a site who actually make a purchase.
Lighting is an inexpensive investment for improving employee performance and the
overall appearance of the business.
Business evaluations based on balance sheet methods offer one key advantage: they
consider the future earning potential of the business.
The statement of cash flows shows the change in a firm’s working capital.
The first step in developing an ethical framework is to identify the key stakeholders.
Workers who telecommute have lower productivity but increased job satisfaction.
Key success factors are simply relationships between controllable factors and critical
elements that permit a firm to compete in its industry.
Promotion includes publicity, personal selling and advertising.
Most successful entrepreneurs accept failure as part of what they do, and they use it to
learn for the “next time.”
The Farmers Home Administration makes direct loans to small businesses meeting the
rural area criteria in order to create nonfarm employment.
The lack of cash has driven a number of small businesses, even those with solid profits,
into bankruptcy.
Advances in technology available to entrepreneurs permit them to move into
manufacturing and compete directly with Fortune 500 companies.
The five-step process for developing an ethical framework is very similar to the process
for problem-solving in business.
The World Trade Organization was formed as a consequence of the growth of the
European Community.
The nice thing about barter is that there is almost no cost involved in the process.
When setting prices, business owners should automatically match or beat the
competitors.
Since conditions and markets change so rapidly, entrepreneurs developing financial
forecasts for start-ups should focus on creating projections for 6 months into the future.
Small businesses selling on credit find that:
A) it is relatively inexpensive and simple.
B) it is expensive and requires a great deal of effort.
C) it is essentially borrowing money from the customer.
D) many can get by without selling on credit because their business customers don’t
expect to use credit.
Under ________, a manufacturer splits the cost of advertising with a small retailer if the
retailer features its product.
A) cooperative advertising
B) shared advertising
C) direct advertising
D) integrated marketing
A lock-up agreement:
A) prevents the sale of “insider” shares for a specific period of timeoften 12 to 36
monthsafter an initial public offering (IPO).
B) prevents a small company from signing on with other underwriters to make an IPO.
C) prevents a company about to make an IPO from signing a union contract.
D) establishes the final price of the IPO so that it cannot fluctuate before the stock
offering is actually made.
TIGER:
A) is a software package combining the ability to draw detailed maps with the power to
search through databases.
B) records data not available through the census and includes eleven indicators of
economic growth.
C) contains the names of every street in the country and detailed block statistics for 345
urban areas.
D) breaks down the population, retail sales, etc. by census region.
In the ABC method of inventory, A refers to:
A) items that account for a high dollar usage volume.
B) items that account for a moderate dollar usage volume.
C) items that account for low dollar usage volume.
D) None of the above
A highly possible source of funding for a start-up and early business is:
A) venture capital and private placement.
B) personal savings and retained earnings.
C) personal savings and partners.
D) IPO and Regulation A.
Territorial protection in franchising:
A) varies according to industry.
B) is basically every franchisee for him/herself.
C) is absolute and uniform across industries.
D) is no longer an issue for most franchisees.
Perpetual inventory systems:
A) are relatively inexpensive to use and therefore quite popular among discount
retailers.
B) are not particularly effective for keeping accurate track of large, expensive items.
C) require consistent use of the inventory sheets in order to provide accurate results.
D) are the simplest and quickest to use of all inventory systems.
Using the discounted future earnings approach, the buyer estimates:
A) the company’s net income for the next six months.
B) the company’s net income for the several years.
C) the company’s net income for several years and then discounted back to the present
value.
D) the company’s net asset for several years and then discounted back to the present
value.
The ________ brain processes information intuitively.
A) left
B) right
C) front
D) back
When employees can set their own work hours within certain guidelines, they are
involved in:
A) flextime.
B) flexplace.
C) job sharing.
D) hoteling.
________ are entrepreneurs who operate within the framework of an existing business.
A) Managers
B) Disruptors
C) Intrapreneurs
D) Challengers
Acme Corporation is chartered in Delaware, but its primary area of operation is in
South Carolina. In South Carolina, Acme would be considered a(n) ________
corporation.
A) alien
B) domestic
C) foreign
D) local
It is important for the small business owner to remember that the strategic planning
process is:
A) an ongoing process that must be repeated.
B) a top management process completed only once every two years.
C) a process which involves all the employees once every five years.
D) one that should produce a detailed, elaborate plan for running the business over the
next 3″5 years.
These are products of the interaction of various forces, trends, and events that are
outside the control of the small business.
A) Distinctive competencies
B) key success factors
C) Opportunities and threats
D) Strengths and weaknesses
Which of the following factors is vital to determining the effects of competition on the
small firm’s pricing policies?
A) The competitor’s location
B) The availability of capital for production
C) The form of ownership of the small business
D) The type of outlet the business is
A well-developed business plan provides the entrepreneur with a number of benefits,
such as:
A) a way to identify probable financial backers.
B) a valuable tool for recruiting management to help in running the business.
C) assisting the entrepreneur in going public with his/her new venture on the stock
market.
D) determining the principal risks confronting the business.
A business founder relying on a lifetime giving strategy to minimize the taxes on the
estate she is passing on to her son can give him a maximum gift of ________ in
company stock each year, tax exempt.
A) $5,000
B) $14,000
C) $25,000
D) $100,000
Employees’ biggest complaint about performance appraisals tends to be:
A) they are unfair and do not measure what they actually do.
B) that they only happen periodically, generally once a year.
C) that they are more demotivating than motivating.
D) most managers don’t know how to conduct them.
Which of the following contracts would be covered by the Uniform Commercial Code?
A) The sale of accounting services
B) The sale of real estate
C) The sale of furniture
D) All of the these
An advantage of using friends and relatives as investors is that:
A) they tend to be more patient.
B) they take a lower return.
C) they don’t want controlling interest in the company.
D) they don’t tend to have unrealistic expectations.
Today, when it comes to product liability, the courts:
A) practice the caveat emptor rule.
B) rule that the scope of warranties include any person incurring personal or property
loss due to a faulty product.
C) hold that the rule of caveat venditor is valid in all cases.
D) hold that only the parties directly involved in the execution of the contract are bound
by the law of sales warranties.
A customer who purchases a television from Ace Appliance Store and pays for it in 36
monthly payments is using:
A) trade credit.
B) charge account credit.
C) installment credit.
D) debit card credit.
One important characteristic of bartering is that:
A) the value of the products must be identical and the difference can be paid in cash.
B) the value of exchange of products or services could vary.
C) the exchange is in cash only.
D) no cash is being exchanged when bartering.
Which of the following trends is feeding the growth of entrepreneurial activity?
A) A greater focus on professional advancement combined with the “flattening” of large
corporations’ management hierarchies
B) The rapid growth of the need for low-technology products
C) A favorable attitude toward entrepreneurs in American society
D) Diminished wage increases in corporations and the desire for a better standard of
living
The first step to building a workable credit policy is:
A) screening customers carefully before granting them credit.
B) establishing a firm credit policy in writing.
C) developing a policy for pursuing past-due accounts.
D) creating a thorough credit application.
Which of the following represents the cost of the units in the basic EOQ model?
A) Q/2 H
B) D C
C) D/Q S
D) (L U) + S
Management incompetence includes all but:
A) the owner lacks the leadership ability necessary to operate it successfully.
B) lack of capacity to make the business work.
C) insufficient capital.
D) inexperience.
Mary started her dot.com business in 2005. Recently, she hired Jackie as VP of Sales
and Marketing. As part of company policy, management was to give a blood test for
verification of AIDS or any drug abuse. When the results came back, Mary found out
that Jackie had AIDS. She was fired because the company does not tolerate having
employees with AIDS.
A) Mary had the right to fire Jackie because it is her company and she can do whatever
she wants.
B) Mary should have consulted with an attorney to find a reason for firing Jackie.
C) Mary is in violation of discrimination laws.
D) Mary should have requested a blood test from everyone on a quarterly basis.
A business plan:
A) is developed through an intuitive process by which the entrepreneur records his/her
plans for the business in the future.
B) focuses on the internal elements of the business.
C) forces an entrepreneur to think a business idea through, considering both its positive
and its negative aspects.
D) is a strategic plan for a business that must be supplemented by operational plans
once financing is secured.
A Geographic Information System (GIS):
A) is a software package combining the ability to draw detailed maps with the power to
search through databases.
B) records data not available through the census and includes eleven indicators of
economic growth.
C) contains the name of every street in the country and detailed block statistics for 345
urban areas.
D) breaks down the population, retail sales, etc., by census region.
The process of testing the business model on a small scale before committing serious
resources to launch a business that might not work is called:
A) benchmarking.
B) business prototyping.
C) scaling.
D) lean modeling.
Employers can reduce employee theft through:
A) careful screening of employees during hiring.
B) only hiring relatives and the friends of current employees.
C) the use of metal detectors and random strip searches of employees.
D) searching employees’ lockers and cars during work hours.
In ________, managers or employees, or both, borrow money from a financial
institution and pay the owner the total agreed-upon price at closing; then they use the
cash generated from the company’s operations to pay off the debt.
A) a leveraged sellout
B) a leveraged buyout
C) owner financing
D) 100% bank financing