Identifying risks is the first task to be completed before a comprehensive insurance
program can be developed for a business.
Economic order quantity (EOQ) is also called reorder point.
According to the Panel Study of Entrepreneurial Dynamics, the business idea and the
decision to start a business were simultaneous for a majority of entrepreneurs.
In the BRIE model, exchange refers to moving resources, goods, or services to others,
in exchange for money or other resources.
A start-up usually can easily gain revolving credit from suppliers and financial
institutions.
The first step of the strategic planning process for small businesses is considering your
customers and the benefits you want to offer them.
Cannibalizing occurs when people do work for their part-time business while they are at
their full-time job, blurring the boundary between them.
The financial statements in a business plan include income statements, cash flow,
balance sheet, and their respective assumptions.
The usefulness of the income statement for managing a small business is related to the
amount of detail available in the statement.
Passion is displayed by being persistently focused on the business.
Which of the following terms refers to the activities used to establish and promote a
favorable opinion by the media?
A. Press relations
B. Word-of-mouth communications
C. Sales promotions
D. Ambush marketing
As a new entrepreneur, Anthony’s magic number for 2013 is $42,000. If the current tax
rate for his business is 30 percent, calculate the amount that Anthony’s firm would need
to sell for him to get his magic number.
A. $50,000
B. $50,495
C. $60,000
D. $60,854
Which of the following terms refers to the amount of profit an entrepreneur incurs,
usually stated as a percentage of the total price?
A. Capital
B. Margin
C. Debt
D. Harvest
Ian is developing a business plan for his company. Along with the other sections, the
business plan will also include the marketing plan of his company. To avoid duplication
of information, which of the following should Ian typically avoid including as a key
component of the marketing plan?
A. Specific details about the company’s target market
B. Information about the company’s present and near future situation including
competitors
C. Balance sheets and income statements of the company
D. Details of the company’s differential advantage
When an existing firm with the correct production capabilities makes your product for
you, it is referred to as _____.
A. contract manufacturing
B. a sheltered workshop
C. e-tailing
D. freight forwarding
Which of the following statements is true about fixed costs?
A. They can be assigned to a specific item sold or manufactured.
B. They are unaffected by changes in output.
C. They increase as the number of units produced increases.
D. They include expendables.
Which of the following statements is true regarding the entry wedge of supply
shortage?
A. It occurs when a new product is in demand.
B. It takes place in a stable market that doesn’t change rapidly.
C. It takes place in a long-term market.
D. It occurs when certain physical resources are unutilized.
An ethical model conceived by the German philosopher Immanuel Kant which suggests
that there is a code of right and wrong that everyone can see and follow refers to _____.
A. the billboard principle
B. universalism
C. caveat emptor
D. utilitarianism
Which of the following is a correct representation of typical accounting functions?
A. Credit card sales function helps to ensure that payroll and employment taxes are kept
current.
B. Accurate and timely accounts receivable records are essential for making decisions
concerning the extension of credit.
C. Leasehold records help to ease the problems of keeping necessary insurance
coverage current and in force.
D. Insurance register helps to track the amount of discount and charge backs taken by
your credit card provider.
A _____ budget is also referred to as a master budget.
A. comprehensive
B. cash receipts
C. cash disbursements
D. capital
Kevin has taken an apartment on lease for five years with a monthly rental of $3,500.
At the end of five years, Kevin will be the legal owner of the apartment after an
additional payment of $80,000. This type of lease is an example of a _____ lease.
A. leveraged
B. capital
C. direct
D. operating
_____ refers to the ability of a business to survive adverse financial events.
A. Liquidity
B. Financial flexibility
C. Financial strength
D. Profitability
Investing in multiple investments of differing risk profiles for the purpose of reducing
overall investment risk is called _____.
A. digression
B. deviation
C. specialization
D. diversification
Gabriel has a product idea of a device which he believes will help people manage their
daily chores, hence making their lives easier. The description of the product is most
likely to address which aspect of the I2P analysis?
A. The extent of IP protection for the idea
B. The novelty of the product
C. The royalty that the product is likely to generate
D. The value add for customers
Discuss any four price lowering techniques that a small business owner can adopt
without starting price wars or reducing the quality perception of his or her products?