Communication in a timely and professional manner is key to effective collection
activities.
As the domestic market for franchises has become increasingly saturated with outlets,
the number of franchisers attracted to foreign markets has grown.
The opportunity to reap impressive profits is the primary motivation for most
entrepreneurs.
A company with a times-interest-earned ratio that is well above the industry average
would likely have difficulty making the interest payments on its loans, as creditors
would see that it was overextended in its debts.
Compiling the total cash on hand, bank balance, summary of the day’s sales, summary
of the day’s cash receipts, and a summary of accounts receivables collections into
monthly summaries provides the basis for making reliable cash forecasts.
Break-even pricing will determine the price that will cover total fixed and variable costs
and generate a reasonable profit.
A key aspect of an online strategy is to create it with the target audience in mind.
The three biggest domestic barriers to exporting facing small businesses are attitude,
information, and financing.
An idea assessment is the process of examining a need in the market, developing a
solution for that need, and determining the entrepreneur’s ability to successfully turn
that idea into a business.
Most businesses are finding technology provides efficiency and speed in providing a
wide array of services to their customers.
A location in a city offering a high quality of life can be attractive to the entrepreneur
and may make ________ easier.
A) financing
B) recruiting employees
C) resolving zoning issues
D) access to a trading area
In the ________ form of ownership, the business itself pays income taxes.
A) proprietorship
B) partnership
C) corporation
D) All of the above
The type of job design that adds more tasks to a job to broaden its scope is known as
________.
A) job rotation
B) job enlargement
C) horizontal job loading
D) Both B and C
Mini-Case 11-2: Bowden Brake Service (Part B)
One day while you are in Bowden Brake Service getting your brakes repaired, Jim
storms into his office, slamming doors and shouting about the local financial
institutions. After a few minutes of building your courage, you approach Jim and ask
him what the problem is. He shouts, “It’s the financial institutions in this town! Not one
of them will lend me the money I need to expand my business. They all said I needed to
take a closer look at my financial position before I consider expanding. One of them
said something about ratio analysis. I know a lot about cars and brakes, but what is ratio
analysis?”
You tell Jim you will perform a ratio analysis for the business if he gives you a free
brake job. Jim provides you with the following financial statements.
The break-even point ________.
A) occurs where a company’s total revenue equals its total expenses
B) is the point at which a company neither earns a profit nor incurs a loss
C) tells a business owner the minimum level of activity needed to keep her company in
operation
D) All of the above
How can a company achieve stellar customer service and satisfaction?
A) Listen to customers and define superior service.
B) Set standards and measure performance.
C) Hire the right employees and treat them with respect.
D) All the above
A company that pays a search engine for the right to submit either selected pages or the
entire content of the Web site is referred to as ________.
A) click fraud
B) web analytics
C) paid or sponsored listings
D) Really Simple Syndication (RSS)
A common mistake entrepreneurs make is ________.
A) assuming that a market exists for their product or service
B) taking too much time to conduct planning and research
C) conducting informal research
D) conducting online research, which is too impersonal and does not yield accurate
information
Company culture has a powerful impact on ________.
A) the way people work together in a business
B) how people in a company do their jobs
C) how people in a company treat their customers
D) All of the above
Which of the following measures a company’s liquidity and its ability to pay its bills
and other financial obligations on time?
A) Cash budget
B) Cash flow
C) Cash management
D) All of the above
Rule ________ of the Regulation D exemptions is the most popular.
A) 202
B) 314
C) 426
D) 504
The small country of Bascovina wanted to protect its infant basket industry and
imposed a 400 percent tariff on all imported baskets. The high tariff dropped the bottom
out of imported basket sales, and imports of baskets stops. Why did this happen?
A) The citizens realized that because the government imposed the tariff, imported
basket purchases were undesirable.
B) The tariff reduced the price of imported baskets and consumers felt that because of
the low prices, the baskets were of low quality and stopped their purchases.
C) The tariff barred all shipments of baskets to Bascovina.
D) The tariff makes the price of imported baskets so high that they are not competitive.
Mind mapping is a useful tool for jump-starting creativity. It includes all of the
following except ________.
A) sketching a picture to symbolize the problem or area of focus in the center of a sheet
of paper
B) writing down every idea that comes into your mind, connecting each idea to the
central picture
C) allowing your mind to rest for a few minutes before integrating the ideas
D) forcing creativity when ideas start to trickle
Which of the following statements concerning the impact of competition on a small
company’s prices is true?
A) When setting prices, a business owner must either match or beat competitors’ prices
on similar products or services.
B) Because federal laws prohibit the practice as an unfair trade practice, business
owners should not monitor their rivals’ prices on identical items.
C) When going up against larger, more powerful rivals, small firms should consider
using nonprice competition as a way to differentiate their products or services rather
than head-to-head price competition.
D) All of the above
The force from the five forces model that considers economies of scale, initial capital
requirements, cost advantages relevant to company size, and lack of brand loyalty is the
________.
A) bargaining power of suppliers
B) threat of new entrants
C) threat of substitute products or services
D) rivalry among companies competing