A common pitfall in selecting a new venture is
a. poor financial understanding.
b. proper objective evaluation.
c. real insight into the market.
d. none of the above.
Which of the following statements about a business plan is true?
a. It is the entrepreneur’s road map for profits.
b. It is the minimum document required by financial sources.
c. It allows the entrepreneur to avoid pitfalls in starting a new venture.
d. It describes the entrepreneur’s ideas and thoughts.
Logical and analytical skills are developed in the
a. left hemisphere of the brain.
b. right hemisphere of the brain.
c. central hemisphere of the brain.
d. anterior hemisphere of the brain.
Equity capital is often raised through:
a. public stock offerings.
b. option sales.
c. donations.
d. preferred issues.
All of the following techniques are used in gathering primary data except
a. observational methods
b. analysis of financial records
c. surveys
d. experimentation
The individual who buys the franchise is the
a. franchisee.
b. franchisor.
c. franchisette.
d. franchatter.
In attempting to create an entrepreneurial climate, the organization should consider that
a. the corporations that promote personal growth will attract the best people.
b. strict management rules work best.
c. third-party contractors of labor will not be used.
d. workers like independence.
Which of the following statements is true?
a. People are born with creativity and can do nothing to change their level of creativity.
b. People can learn to be creative.
c. Creativity has nothing to do with learning.
d. The creative mind cannot be developed.
Which of the following is not a trait of successful entrepreneurs?
a. initiative
b. frustration
c. perseverance
d. strategic thinking
Which of the following are considered methods for valuation of a venture?
a. return on investment
b. stock market method
c. multiple of earnings
d. a and c are correct
Return on investment
a. is net profit divided by investment.
b. provides a replacement value.
c. establishes a value for the business.
d. is equal to the current prime rate.
Key elements in plans to create a sustainable future are likely to include which of the
following?
a. eliminating the concept conservation
b. eliminating the concept of waste
c. eliminating the concept of ‘price’
d. eliminating the concept of accountability
A solid analysis is
a. a critical task in starting a new business.
b. of no importance.
c. no way to discover flaws in a new-venture idea.
d. both a and c.
Traditional valuation methods includes all of the following except:
a. adjusted tangible book value
b. price/earnings ratio
c. high equity/low debt
d. discounted earnings
One advantage of the delayed-entry strategy for the younger generation succeeding the
older generation of a family business is that
a. a successor’s skills are judged with greater objectivity.
b. strong relationships are readily established.
c. normal mistakes are viewed as incompetence.
d. knowledge of the environment is limited.
Which of the following is not a contextual aspect to be considered in an effective
succession plan?
a. technology
b. time
c. environmental factors
d. type of venture
Competitor factors in a buying decision do not include
a. quality of the competition.
b. location of the competition.
c. age of the competition’s owners.
d. number of competitors.
Which is not a stage of the evaluation process?
a. initial screening
b. evaluation of the business plan
c. group discussion
d. management integration
When going public specific detailed information that must be presented includes
a. a 20-year plan.
b. the capital structure of the company.
c. any financial conflicts of interest.
d. any previous business failures.
The 4Cs of marketing include all the following except:
a. cocreation
b. communities
c. choice
d. continuity
Many entrepreneurs lack
a. knowledge of their product.
b. venture uniqueness.
c. drive.
d. the willingness to put in long hours.
The decision to behave entrepreneurially is the result of the interaction of:
a. the individual’s personal entrepreneurial mind-set and an opportunity
b. the existence of a viable business idea
c. the relevant business environment
d. a new market
People with muddling mind-sets exhibit all of the following habits except
a. either/or thinking
b. stereotyping
c. process thinking
d. security hunting
Which is one of the most important questions for entrepreneurs to ask regarding venture
capitalists?
a. What is it like to work with their firm?
b. Are they good communicators?
c. Are they wealthy?
d. Are they good at financial computation?
Babies and career are indicative of the priorities that shape the buying decisions of
persons in the nestbuilding stage of the family life cycle.
Entrepreneurs like to remain alert to competition, customers, and government
regulations, but this continual scanning of the environment can lead to a negative sense
of distrust.
Creative people always exhibit a strong need for group approval.
The major purpose of a business plan is its utilization as a working document.
New and smaller firms obtain more patents per sale than do larger firms.