The growth of entrepreneurship is being fed by:
A) the return to a manufacturing-based economy.
B) technological advancements.
C) diminished opportunities in overseas markets for larger corporations.
D) the vilifying of large corporations in society.
The ________ is a document that states in writing all of the terms of operating a
business among the partners.
A) Sole Proprietorship Agreement
B) Articles of Corporations
C) Partnership Agreement
D) Limited Liability Corporation Agreement
Which statement is correct?
A) Lenders and investors are familiar with industry cost structures.
B) A lender’s main consideration in granting a loan is the reassurance that the applicant
will repay.
C) An investor’s major concern is earning a satisfactory rate of return.
D) All of the above
The ________ is (are) a set of measures unique to the company that gives managers a
quick and comprehensive view of how the business is doing and includes both financial
and operational factors.
A) core competencies
B) key success factors
C) balanced scorecard
D) action plan
Small manufacturers (for example) needing money for fixed assets with long repayment
schedules have access to an attractive, relatively inexpensive source of funds called:
A) zero-coupon bonds.
B) industrial development bonds (IDBs).
C) corporate bonds.
D) Both A and C
Newton orders 14 electric staplers for his office supply store from Home Office
Suppliers. The contract specifies shipping terms as “F.O.B. Home Office Suppliers.”
Home Office Suppliers delivers the goods to Zippy Shippers and invoices Newton. The
electric staplers never arrive, and Newton refuses to pay Home Office Suppliers. Home
Office Suppliers sues Newton for the contract price of the staplers. Who wins?
A) Newton, because it wasn’t his fault that the staplers never arrived.
B) Home Office Suppliers, because they were the last ones to touch the goods.
C) Newton, because in an F.O.B. contract, the risk of loss does not shift to the buyer
until the goods are actually delivered to the buyer.
D) Home Office Suppliers, because in an F.O.B. seller contract, risk of loss shifts to the
buyer when the seller delivers the goods to the carrier.
A ________ is a special type of irrevocable trust and has become one of the most
popular tools for entrepreneurs to transfer ownership of a business while maintaining
control over it and minimizing estate taxes.
A) grantor retained leverage trust
B) grantor retained annuity trust
C) guarantee retained annuity trust
D) grantor retained life insurance
Competitor’s analysis should identify:
A) Who are the company’s key competitors?
B) What are their strategies?
C) What images do they have in the marketplace?
D) All of the above
If a small business owner wants to use television advertising, he/she should:
A) go for national advertising to get the maximum absolute cost advantage.
B) try to use cable which costs $200 or less for a 30 second spot.
C) consider radio instead because they have identical advantages.
D) remember that television is one of the least flexible media.
Efficient cash managers:
A) disregard trade discounts because of their hidden expenses.
B) avoid the use of credit cards to stretch their firm’s cash balance.
C) set up a payment calendar in order to both pay on time and take advantage of cash
discounts for early payment.
D) use expressions like “the check’s in the mail” to mollify creditors when short on
cash.
The Web offers shoppers the ultimate in:
A) convenience.
B) quality.
C) differentiation.
D) service.
The most meaningful basis for comparing operating ratios is:
A) other companies of similar size in the same industry.
B) companies within the neighborhood.
C) major corporations in the same industry.
D) all publicly traded companies.
The median selling price of a private company is:
A) $75,000.
B) $125,000.
C) $275,000.
D) $420,000.
Small Business Investment Companies (SBICs):
A) prefer to finance companies in later stages rather than “raw start-ups.”
B) only provide long-term debt financing to small businesses.
C) cannot make their own investment decisions, which are controlled by the SBA.
D) loan money through debentures not requiring regular interest payments.
The first phase in determining where to locate a business is:
A) choosing what state the business owner wants to move to.
B) determining which city has the demographics that fit the business best.
C) conducting an Internet search for information on the cities of choice and competitors
in those cities.
D) determining what regions in the country have what the new business needs to
succeed.
Holding or carrying costs include the costs of:
A) ordering materials and inventory.
B) receiving and inspecting items and all administrative costs.
C) insurance, taxes, depreciation, etc.
D) processing a purchase order.
Cost-plus pricing has several disadvantages, including:
A) it clouds the relationships among price, volume, and costs.
B) it fails to consider the competition sufficiently.
C) a mentality of “I-can-do-it-cheaper,” leading to price competition with larger
companies.
D) it tends to be reactive rather than proactive in relation to competition and market
forces.
Shares the corporation itself owns are called:
A) treasury stock.
B) common stock.
C) preferred stock.
D) bonds.
________ offer(s) liability coverage that protects against losses resulting from injuries,
damage, or theft involving the use of company vehicles.
A) Worker’s compensation
B) Surety insurance
C) Professional liability insurance
D) Auto insurance policies
The ________ ratio measures the owner’s rate of return on the investment in the
business.
A) net profit-to-equity
B) net profit on sales
C) quick profit
D) net sales-to-working capital
________ are a unique set of capabilities that a company develops in key areas, such as
superior quality, customer service, innovation, team-building, flexibility, speed,
responsiveness, and others that allow it to vault past competitors.
A) Core competencies
B) Focus strategy
C) Cost leadership strategy
D) None of the above
A company using a risk transfer strategy would do which of the following?
A) Buy an insurance policy to cover the risk.
B) Cease the process or function that constituted the risk.
C) Educate employees as to the risks and dangers of the problem process.
D) Set resources aside to deal with the problem when it arose.
“Angels”:
A) are hard investors to please. Nearly 70% are dissatisfied with their investment.
B) tend to be easy to get money from as they accept nearly 60% of the opportunities
presented.
C) have an average of $150,000 invested in 3.5 firms at any given time.
D) only finance deals requiring over $1 million in capital.
In terms of contractual capacity:
A) a minor can disaffirm and walk away from a contract even if already executed and
the minor has benefited from it.
B) intoxicated individuals are generally always held liable for their contractual
obligations, regardless of their condition upon execution of the contract.
C) an insane person can never have contractual capacity by definition.
D) if a minor benefits from a contract and then disaffirms it, he/she must fulfill the duty
of restoration.
A small business owner needs to do which of the following well in order to successfully
implement a TQM program?
A) Focus on production and manufacturing
B) Set a “finishing line” for the quality effort
C) Move from a management-driven to team-driven company culture
D) Modify the rewards program to reward individual effort and innovation
When a small business is refused a loan because it is not profitable and deemed a poor
credit risk, the owner can usually turn to ________ as a source of short-term funds.
A) venture capital companies
B) trade credit
C) stockbrokers
D) loans from insurance companies
One of the best ways to cultivate a culture of creativity is to hire a ________.
A) monolithic workforce
B) diverse workforce
C) homogeneous workforce
D) local workforce
________ are negative external forces that inhibit the firm’s ability to achieve its
objectives.
A) Strengths
B) Weaknesses
C) Opportunities
D) Threats
The small company’s purchasing plan is closely linked to which of the other functional
areas?
A) Marketing and sales
B) Finance and accounting
C) Production and engineering
D) All of the above
The statement, “collection of accounts receivable lags behind sales,” means that:
A) the collection of funds in the accounts receivable is always late.
B) customers always are late in paying their bills.
C) the customers who purchased goods on credit may not pay until a month or more
later.
D) None of the above
The profit and loss statement is also referred as the ________.
A) balance sheet
B) statement of cash flows
C) revenue statement
D) income statement
Business ethics consist of the fundamental ________ values and behavioral standards
that form the foundation for the people of an organization as they make decisions and
interact with stakeholders.
A) religious
B) moral
C) societal
D) legal
________ suits many e-tailers perfectly.
A) Drop-shipping
B) Virtual shipping
C) Customer shipping
D) Group shipping