Life cycle pricing is a short-term pricing strategy that assumes that competition will
eventually emerge and the price will be lowered.
Generally, the higher the current ratio, the stronger the small firm’s financial position.
The CAPLine Program makes short-term capital loans to growing companies needed to
finance seasonal buildups in inventory or accounts receivable.
A business plan is a written summary of an entrepreneur’s proposed venture, its
operational and financial details, its marketing opportunities and strategy, and its
managers’ skills and abilities.
Truly customer-oriented companies seek to go beyond customer satisfaction, striving
for superior customer service.
Concerning how much cash to have at startup, one rule of thumb is to have enough to
cover operating expenses (less depreciation) for two inventory turnover periods.
A skimming price strategy is used to introduce relatively low-priced goods into a
market where no “elite” segment exists.
More than 75 percent of small business owners who have Web sites engage in
e-commerce.
The five forces model would assess economies of scale factors in the “threat of new
entrants” portion of the model.
The primary purpose of building a business plan is to raise capital.
Creativity is the ability to develop new ideas and to discover new ways of looking at
problems and opportunities.
To boost sales, small businesses, especially start-ups, should grant credit to anyone who
wants to buy their products or services.
The strongest of the five forces in most industries is ________.
A) rivalry among companies competing in the industry
B) bargaining power of buyers
C) threat of new entrants to the industry
D) threat of substitute products or services
A pricing technique that sets prices that always end in numbers like “99” for prices such
as $9.99 and $19.99 is an example of ________ pricing.
A) odd
B) price
C) customized
D) zone
A/An ________ is a private, for-profit organization that purchases equity positions in
young businesses that will potentially produce returns of 300 to 500 percent over five to
seven years.
A) commercial bank
B) venture capital company
C) angel
D) SB-1 filing
One survey reports that ________ percent of shoppers have gone into a store as a result
of an online encounter with a business.
A) 63
B) 91
C) 85
D) 72
________ is necessary for building a competitive advantage and for business survival.
A) One single idea
B) A motivated owner
C) Creativity
D) A low-priced product
When choosing a state in which to locate, one must evaluate which of the following?
A) The general business climate
B) The state’s business laws, regulations, and taxes
C) Tax incentives and/or investment credits
D) All of the above
Which of the following is an important consideration for an entrepreneur evaluating a
shopping mall or center location?
A) In terms of customer demographics, is the mall or center a good fit for my products
or services? How much foot traffic and vehicle traffic does the mall or center generate?
B) Who are the other tenants? The anchor tenants? Is there a good fit for my products
and services?
C) What are the mall’s or center’s vacancy and turnover rates?
D) All of the above
The document outlining the details of the agreement between the entrepreneur and the
stock underwriter is called ________.
A) Regulation D
B) a “blue sky” agreement
C) the letter of intent
D) the registration statement
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 return on net worth ratio for Meters, Inc.?
A) 8.5 percent
B) 1.91:1
C) 21.8 percent
D) 29.3 percent
Efficient cash managers ________.
A) disregard trade discounts because of their hidden costs
B) avoid the use of credit cards to stretch their firm’s cash balances
C) set up a payment calendar to both pay on time and take advantage of cash discounts
for early payment
D) use expressions like “the check is in the mail” to mollify creditors when short on
cash
By ________, the majority of the workforce in the United States will be a member of a
minority.
A) 2021
B) 2039
C) 2028
D) 2019
To encourage credit customers to pay invoices promptly, a business owner should
________.
A) ensure that all invoices are clear, accurate, and timely
B) state clearly a description of the goods or services purchased and an account number
C) include a telephone number and a contact person in case the customer has a question
or a dispute
D) All of the above