When using the internal rate of return method, the future cash flows are discounted at a
rate that makes the net present value equal to
a. assets minus liabilities.
b. assets minus owner’s equity.
c. assets minus (liabilities plus owner’s equity).
d. zero.
Which of the following statements is false?
a. Entrepreneurs are born with the skills necessary to manage a business.
b. Their belief in their ability seldom wavers.
c. Independence is a driving force behind contemporary entrepreneurs.
d. Entrepreneurs know where they want to go.
TBL focuses on all the following except
a. profits
b. people
c. the planet
d. precedence
Barriers to successful succession planning, discussed in the text, include which of the
following?
a. nobody wanting to own the firm.
b. lack of a final will.
c. dilemma of choice.
d. lack of profits.
The amount of capital required to start a new venture _____.
a. can vary considerably depending upon the industry
b. is generally the same for all start-ups
c. is never available
d. will always be small
A typical example of a forcing event is
a. death.
b. a natural disaster.
c. an IRS audit.
d. a slow business year.
Cash inflows come from
a. cash sales.
b. cash payouts.
c. debts.
d. short-term liabilities.
Stress can be dealt with by:
a. networking.
b. delegating.
c. both a and b.
d. working harder.
Failure of a new venture can be avoided
a. by being a high-risk taker.
b. through a careful profile analysis.
c. through both a and c.
d. through none of the above.
Which of the following does not represent a category of angel investors?
a. micromanagement angels
b. entrepreneurial angels
c. amateur angels
d. corporate angels
To avoid the pitfall of ‘no market niche’ (segment), do what?
a. conduct a market analysis
b. imitate the competition
c. clearly target a niche
d. create a market niche
Venture proposals are often rejected due to significant deficiencies in
a. the size of the proposal.
b. financial projections.
c. available funds.
d. both a and b.
In the entrepreneurial strategy matrix, the creation of something new and different is
categorized as
a. an innovation.
b. a risk.
c. a time lag.
d. a psychological commitment.
In order to obtain a patent, an application should be filed with
a. the Office of Government Publications.
b. the Patent and Trademark Office of the Department of Commerce.
c. Government Accounting Office.
d. the United States Small Business Association.
The _____ approach indicates the importance of people’s awareness of their daily lives
for developing new business ideas.
a. new-new
b. old-old
c. old-new
d. new-old
Advantages of debt financing include all of the following except:
a. low interest rates that justify the opportunity cost.
b. regular interest payments.
c. potential greater return on equity.
d. no relinquishment of ownership.
A patent is an intellectual property right.
Name five entrepreneurial characteristics that you feel are important.
Anyone who violates an author’s exclusive rights under a copyright is liable for
infringement.
New and smaller firms are responsible for 95 percent of all radical innovations.
Chapter 13 bankruptcy involves a reorganization of the enterprise.
One suggestion for helping to recall key examples, visual aids, and other details when
presenting the business plan is to utilize key words in the outline.
The way to approach a new business venture is to think up a good or service that is
unique.
I-Teams are rarely seen in corporate entrepreneurial environments.
Buyers and sellers assign different values to a business.
A business plan must illustrate the current status of the venture but not the projected
results.