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A small business whose sales are highly variable, such as a seasonal business, should
use a short cash planning horizon.
The most reliable method of determining an adequate minimum cash balance is using
estimates of similar businesses from trade literature.
Businesses typically foster an environment that encourages creativity.
A good method for evaluating a franchisor's reputation is to interview existing franchise
owners about the operation.
Private investors, or angels, seek 60 to 75 percent annual return on investment, which is
much higher than those of professional venture capitalists, and tend to take a 51+
percent share of the business.
It is extremely difficult for a startup company with no track record of success to raise
money with a public stock offering.
The goal of cash management is to maintain as much cash as possible on hand to meet
any unexpected circumstances that might arise.
Forty percent of industrial and wholesale sales are on credit and 90 percent of retail
sales are on account.
Entrepreneurs who start businesses because they cannot find work any other way are
________.
A) necessity entrepreneurs
B) serial entrepreneurs
C) opportunity entrepreneurs
D) corporate cast-offs
For entrepreneurial companies that lack brand and name recognition, and if building
name recognition is one of the keys to success on the Web, one effective and affordable
option may be to ________.
A) invest more in online promotion
B) rely on viral marketing
C) develop better brand recognition
D) form strategic alliances with larger companies that can add credibility
Which of the following is a danger of using a niche strategy?
A) Niches change.
B) Niches can go away.
C) Entering a niche requires adaptability in your initial plan.
D) All of the above
________ monitor customers' behavior while they are on a site, giving Web-based
businesses the information they need to make their Web sites and their online ________
efforts more effective.
A) Wikis; social marketing
B) Tracking tools; marketing
C) Tracking tools; security
D) Tracking tools; listings
For Meters, Inc., refer to the following information to answer the question(s) below:
Meters, Inc., reported net sales of $874,916 and a net profit of $74,563 on its most
recent income statement. The company's balance sheet shows total assets of $342,742
and total liabilities of $88,367.
What is the net profit margin for Meters, Inc.?
A) 8.5 percent
B) 1.91:1
C) 21.8 percent
D) 29.3 percent
Refer to the following information to answer the question(s) regarding Port Royal:
Port Royal's profit margin on sales is ________ percent.
A) 5.2
B) 32.5
C) 16.1
D) 8.0
The ability to see the similarities and the connections among various data and events is
called ________.
A) convergent thinking
B) divergent thinking
C) transformational thinking
D) illumination
Ideally, a focus group should have ________ members.
A) 2-3
B) 16-20
C) 8-12
D) 5-7
Mini-Case 2-1: Doing "good" but not doing the "right" thing
Ed and Marci Buchanan are spouses and partners in a business called "Flags
Unlimited." They made and sold a variety of national flags in various shapes. About 40
percent of their total revenues came from a single chain retailer, MegaMart USA that
owned 798 stores throughout the United States. When Ed and Daisy started their
company, their son's classmate's father was a senior buyer at MegaMart USA. The
buyer, Arturo Higuain, encouraged Ed and Daisy to submit a bid to MegaMart USA and
he helped the couple establish the relationship that led to subsequent recurring sales at
the retailer. Higuain's wife, Lupe was the head of the school's PTA and in charge for
fund raising. Without Arturo's asking, the Buchanans started contributing significant
sums of money to the PTA. Arturo never discouraged them from contributing. In a cost
cutting move, Arturo was laid off from MegaMart USA and in his place, Cindy
Carmichael became the buyer who interacted with the Buchanans. Cindy hinted to the
Buchanans that there were other vendors willing to supply flags at a lower price than
the Buchanans but that if they would contribute to the rebuilding of her (Cindy's)
community's softball park, they would continue to sell their product at MegaMart USA.
If the Buchanans agree to pay for the community park in exchange for business from
Cindy, would they have acted ethically?
In a survey of members of Generation Z, ________ percent said they would rather save
money than spend it.
A) 57
B) 25
C) 31
D) 44
________ involves developing a game plan to guide a company as it strives to
accomplish its mission, goals, and objectives to keep it on its desired course.
A) Competitive advantage
B) Mission
C) Strategic management
D) Market segmentation
The cost to check a potential customer's credit at a reporting service starts at
$________.
A) 5
B) 40
C) 119
D) 499
Many Web sites seek to create, develop, and facilitate a ________.
A) technology that is fast and complex
B) site that appeals to a broad range of diverse visitors
C) community of customers with similar interests
D) site that provides a variety of information that most anyone can find useful
Perhaps the best domain name is one that ________.
A) customers can easily guess if they know the company's name
B) is complex to stop competitors from copying it
C) sounds very much like a larger competitor's name
D) does not use the company's initials
