Most service firms base their prices on:
A) fairly stable pricing policies.
B) the cost of the service plus an estimate of the value they add in delivering the
service.
C) market surveys on their respective industries.
D) an hourly basis for services rendered.
Doing what is “right” as opposed to what is “wrong” is:
A) the law.
B) ethical behavior.
C) legal behavior.
D) business behavior.
In installment loans, the loan’s ________ schedule typically coincides with the length of
the equipment’s usable life.
A) interest
B) tax
C) evaluation
D) amortization
________ thinking is considering a problem from all sides and jumping into it at
different points.
A) Vertical
B) Lateral
C) Simultaneous
D) Parallel
Dotty has her competitors’ price information. Her most effective use of that information
would be to:
A) seek to match her competitors.
B) undercut competitors’ prices.
C) create a premium image by setting her prices higher than competitors.
D) use it as one variable in her pricing mix.
The most common channel of distribution for consumer goods is:
A) manufacturer → consumer.
B) manufacturer → retailer → consumer.
C) manufacturer → wholesaler → retailer → consumer.
D) manufacturer → broker → consumer.
Once a manager recognizes the ethical dimensions involved in a dilemma or decision,
his/her next step in establishing a workable ethical framework to guide him/her would
be to:
A) identify key stakeholders and assess how the decision will affect them.
B) generate alternative choices.
C) distinguish between ethical and unethical responses to the situation.
D) determine who is most responsible for making and implementing the decision.
A(n) ________ is a nonprofit organization licensed by the SBA and designed to
promote economic growth in local communities.
A) FDC
B) CDC
C) GDC
D) RDC
The ________ requires all franchisers to disclose detailed information on their
operations at the first personal meeting or at least fourteen days before a franchise
contract is signed or any money is paid.
A) FCC
B) FDD
C) Trade Regulations Rule
D) FDA
A small business owner would conduct a competitive analysis in order to:
A) influence customers’ perceptions of the company and products’ image.
B) avoid surprises from existing competitors and to identify potential new competitors.
C) divide the market into smaller, homogeneous units.
D) scan the environment for weaknesses and strengths on which to capitalize.
________ is unsolicited commercial e-mail.
A) E-mail advertising
B) Banner advertising
C) Spam advertising
D) Cookie advertising
Insurance companies typically make two types of loans:
A) policy loans and mortgage loans.
B) asset-based, inventory and discounted accounts receivable.
C) short-term and policy loans.
D) mortgage loans and unsecured loans.
Which of the following is true about choosing a limited liability company form of
ownership?
A) It has no disadvantages except its newness.
B) It is ideal for a new company but difficult to convert to with an existing company.
C) It is inexpensive, easy to form, and covered by little regulation due to its newness.
D) It’s an excellent conversion vehicle for existing businesses that are suffering from
double taxation but problematic for sole proprietorships.
The ________ is a separate legal entity apart from its owners and may engage in
business, make contracts, sue and be sued, and pay taxes.
A) sole proprietorship
B) corporation
C) partnership
D) joint venture
This form of ownership is the same as a corporation in terms of legal characteristics
even though Congress is considering legislation that would further simplify its
formation and running. Its distinction from a corporation is made for federal income tax
purposes only.
A) S-corporation
B) Master limited partnership
C) Sole proprietorship
D) Limited liability company
A(n) ________ is a private nonprofit financial institution that will make small loans to
its members for the purpose of starting a business.
A) SBIC
B) private placement
C) credit union
D) insurance company
________ clauses require the buyer to pay the full amount of the remaining loan
balance or to finance the balance at prevailing interest rates.
A) Diligence
B) Lien
C) Foreclosure
D) Due-on-sale
For many entrepreneurs, the barrier for launching e-commerce is:
A) where and how to start an e-commerce effort.
B) lack of funding.
C) lack of IT staff.
D) Both B and C
When examining a state’s available labor force, the potential business owner needs to
know:
A) the state’s labor relations history.
B) the demographics of the target customers.
C) both the number and education of the available workforce.
D) the proximity of its customers.
________ is not one of the three estimates a financial analyst suggests.
A) Optimistic
B) Pessimistic
C) Standard
D) Most likely
Which of the following is correct?
A) Assets ” Liabilities = Equity
B) Assets ” Equity = Liabilities
C) Assets = Liabilities + Equity
D) All of the above
One key to success with a business startup is to begin with enough ________.
A) capital
B) sales
C) accounts payable
D) suppliers
A dentist or an attorney would buy malpractice insurance to transfer the risk of lawsuits.
This is a type of ________ insurance.
A) casualty
B) surety
C) liability
D) comprehensive
The purchases for inventory and production lead sales. This statement means that:
A) purchases for inventory and production provide sales leads.
B) the bills for inventory typically must be paid before sales are generated.
C) cash must be available in order to pay for the purchases.
D) Both B and C
John is reviewing the company’s costs and expenses against revenue for the last year.
John is reviewing the firm’s:
A) balance sheet.
B) income statement.
C) sources and uses of funds statement.
D) pro forma.
Which of the following expenses would likely be classified “semi-variable”?
A) Rent
B) Electric utilities
C) Wages
D) Sales commissions
The ________ ratio is the liquidity ratio most commonly used as a measure of
short-term solvency.
A) working capital ratio
B) quick
C) debt-to-net worth
D) turnover
Mary’s successful clothing store was located on the back edge of the parking lot of a
large mall. She didn’t pay mall rents since she wasn’t part of the mall, but drew a lot of
customers who parked at the mall and then noticed her store. The mall developers built
a movie theater on the part of the parking lot directly in front of Mary’s store, basically
hiding her from most mall customers and her business dropped off so much she had to
move. What retailer site selection criterion forced Mary to move?
A) Proximity of competitors
B) Visibility
C) Adequate parking
D) Room for expansion
The primary opportunity for time compression management (TCM) lies in its
application to:
A) the purchasing process.
B) the production process.
C) the administrative process.
D) the marketing process.
Depreciation is:
A) the difference between the total sources available to the owner and the total uses of
those assets.
B) listed as a source of funds because it is a noncash expense, deducted as a cost of
doing business.
C) the owner’s total investment at the company’s inception plus retained earnings.
D) creditors’ total claims against the firm’s assets.