Archives: Quiz

Roughly 80 percent of the typical business’ inventory turns over quickly. Diversity may be considered a characteristic of entrepreneurs, as they don’t fit any statistical norm. Answer: TRUE Only about 20 percent of a typical business’ inventory turns over quickly. […]

TRIZ is an acronym for a systematic approach to help solve technical problems based on the study of hundreds of the most innovative patents. A feasibility analysis consists of four interrelated components: an industry and market feasibility analysis, a product […]

The right brain is guided by linear, vertical thinking. The U.S. Copyright Office does not require registering the creative work because registering it does not give creators greater protection over their work. Answer: FALSE Entrepreneurs realize that failure is a […]

Corporations must obtain a federal charter before they can conduct any business. In a partnership, profits (and losses) must be shared according to the ratio of capital originally invested in the partnership. Answer: FALSE A job analysis describes the process […]

The purpose of a feasibility study is to determine whether a business idea is worth pursuing. Equity capital is also called risk capital because these investors assume the primary risk of losing their funds if the business fails. Answer: TRUE […]

Some financial analysts recommend that new owners estimate cash disbursements as best they can and then add another 25 to 50 percent of the total. A strong leader does not share aspects of his or her company’s financial health, its […]

Because inventory is not a liquid asset, cash invested there is tied up and cannot be used for other purposes. About 75 percent of the businesses in the U.S. can be considered ‘small” businesses. Answer: FALSE A corporation formed in […]

The “friendliness” of the overall business environment is an important consideration in location selection and information is available to offer objective insight for this assessment. The first phase in selecting a location is determining what regions of the country are […]

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. Answer: TRUE The CAPLine Program makes […]

One of the cautions with a niche strategy is that niches change. Even though cost-plus pricing is simple, it does not encourage a small business to use its resources efficiently. Answer: TRUE Because installment credit absorbs a company’s cash, many […]

The prices a small business charges influence its image in the marketplace. Capital requirements, estimate earnings, and return on investment are three aspects of the financial feasibility analysis. Answer: TRUE Globally, one in eight adults is actively engaged in launching […]

Communication in a timely and professional manner is key to effective collection activities. As the domestic market for franchises has become increasingly saturated with outlets, the number of franchisers attracted to foreign markets has grown. Answer: TRUE The opportunity to […]

A small business whose sales are highly variable, such as a seasonal business, should use a short cash planning horizon. The most reliable method of determining an adequate minimum cash balance is using estimates of similar businesses from trade literature. […]

Export trading companies are government-owned operations established in countries around the world (including the United States) for the purpose of buying goods there. The balance sheet provides owners with an estimate of the firm’s worth for a specific moment in […]

When filing the corporate charter, a corporation must file in the state in which its headquarters are located. To manage cash efficiently, business owners should strive to accelerate their accounts payable and stretch out their accounts receivable. Answer: FALSE Company […]

A company’s trade area can be influenced by intangible factors, such as physical and political barriers. An important guideline for companies wanting to successfully compete internationally is to familiarize yourself with foreign customs, languages, and cultures, including their lifestyles, values, […]

You should never offer your customers “freebies” unless they are truly valuable and expensive, otherwise you will earn a negative reputation among your customers. Online sales and Internet activity will account for more than 60 percent of total retail sales. […]

Before your Web site can become the foundation of a successful e-business, you must create it with your target audience in mind. The most effective job interviews are unplanned, unstructured interactions between the small business owner and the job applicant. […]

Most firms calculate their quick assets by subtracting the value of their inventory from their current asset total. A limited partner is personally liable only for the amount of money she/he has invested in the partnership. Answer: TRUE Responsible online […]

The more innovative your domain and name, the better. The customer group that spends the most time in shopping malls is teenagers between the ages of 14 and 17. Answer: TRUE Although a small business manager must assume a wide […]

Dumping involves selling large quantities of a product in a foreign market below cost. An inventory turnover ratio above the industry average suggests that a business is overstocked with obsolete, stale, overpriced, or unpopular merchandise. Answer: FALSE For many entrepreneurs, […]

The best pricing strategy for a small business owner to follow is to charge the manufacturer’s suggested retail price. Employee assistance programs (EAPs) are an effective weapon in the battle against workplace substance abuse. Answer: TRUE The Foreign Corrupt Practice […]

The most effective business plans follow the “cookie cutter approach,” following the standard format most preferred by lenders and investors. Narrower product lines, smaller customer bases, and more limited geographic areas give small companies a natural advantage over large businesses […]

Small companies have created at least two-thirds of the net new jobs in the U.S. economy. Entrepreneurs build the foundation for ethical decision making by understanding how their personal values come to life in business situations. Answer: TRUE Social responsibility […]

A tariff is a limit on the amount of a product imported into a country. Developing a cash forecast is essential for new businesses because early profit levels usually do not generate sufficient cash to keep the company afloat. Answer: […]

The Uniform Franchise Disclosure Document (UFDD) is a document that every franchisor is required by law to give prospective franchisees before any offer or sale of a franchise. Because the heart of the cash budget is the sales forecast, the […]

When conducting a regional evaluation, one of the first places an entrepreneur should turn for information is the U.S. Census Bureau. Using focus groups is an example of primary research. Answer: TRUE Because of their size and limited resources, small […]

Studies comparing large companies to small ones have found that large companies’ inability to react quickly is a major barrier to their growth. By using bootstrap marketing strategies (unconventional, low-cost, creative techniques) small companies can get as much “bang” for […]

The greatest opportunities for e-commerce lie in the retail sector. Most stores find it most practical to use a flexible markup, which assigns various markup percentages to different types of products. Answer: FALSE Choosing a location in which many other […]

A typical venture capital firm seeks investments in the $20,000 to $50,000 range and annual returns of 35-50 percent over three to five years. Immoral managers purposely violate law and ethical standards. Answer: FALSE A company’s mission statement defines what […]

Foreign licensing is when a business buys and sells products in many countries, either in its own name, or as an agent for its buyer-seller clients. Adding innovative products and services is important to a companies’ success and small entrepreneurial […]

The Business Model Canvas consists of six elements. NAFTA includes provisions reducing tariff and nontariff barriers and toughening health and safety standards. Answer: TRUE Rather than relying primarily on a single source of funds as they have in the past, […]

Although developing a strategic plan is important for large companies, it is not essential to managing a small company successfully because of its limited resources. Entrepreneurs have three basic strategies to choose from when establishing a new product’s price: a […]

For a new owner of an existing business, physical facilities and equipment costs are very similar to what would have been spent on a startup with all new facilities and equipment. The data shows that writing a business plan increases […]

Generally, an industry is more attractive when substitute products are available for the items suppliers provide. Changing your firm’s shipping terms from “F.O.B. buyer” to “F.O.B. seller” can improve your cash flow, as it switches the cost of shipping from […]

Driving around and observing competition is called “windshield” research. In a recent survey, 92 percent of consumers say that given the opportunity, they would buy products with a social and/or environmental benefit. Answer: TRUE The most effective technique by which […]

Too many marketing plans describe in great detail what an entrepreneur intends to accomplish and pay little, if any, attention to practical and affordable strategies to achieve those targets. Market research requires a business owner to define the objective, collect […]

Right-brain thinking is much like the image of a kaleidoscope. Pure franchising involves a system of franchising in which a franchisor sells a franchisee a complete business format and system. Answer: TRUE A company’s average collection period ratio tells the […]

Trish asks her customer, “Who do you buy your supplies from now?” Which type of question is this? A) confirmation B) probing C) survey D) need-satisfaction E) referral Opportunity management consists of all of the following areas EXCEPT: A) records […]

Zone one, zone two, and the excess zone are used to describe which dimension of our communication styles? A) maturity B) intensity C) predictability D) flexibility E) adaptability As a general rule, we can close more sales by: A) increasing […]

In a situation in which the customer may not be fully aware of a problem, the salesperson will most likely need to: A) recommend another source B) ask more probing questions C) end the sales call and ask for another […]

Research reported in the Harvard Business Review indicates that it is very difficult to build customer loyalty if a firm is selling only the ________ product. A) generic B) expected C) potential D) value-added E) sales A customer walks into […]

Which of the following is NOT an example of performance data? A) a list of product service centers available to customers B) the AHAM certification seal C) a label on a storm window that indicates the product’s “R” value D) […]

Lacey Abrams is the sales representative for the Brook Park Zoo. She sells events, such as wedding receptions, corporate dinners, and fundraisers that are held on zoo grounds. She has just finished negotiating all the details of Anne Mason’s upcoming […]

A customer is rude to the salesperson during sales calls, requests additional research and market data, and refuses to accept courtesy calls from the salesperson. However, the customer places several large orders for the product from the salesperson. Which statement […]

Which combination of communication styles between salesperson and customer will likely result in a good relationship, but will LEAST likely lead to a firm sale? A) directive salesperson with directive customer B) directive salesperson with supportive customer C) supportive salesperson […]

Web-Star makes Web conferencing software with features that integrate directly into users’ back-end systems such as inventory, order processing, shipping, tracking, CRM, and tech support. Using this software, companies can hold internal meetings as well as give sales presentations that […]

Yukie, a salesperson for a North American car manufacturer, told one of her prospects that Honda was being investigated in Japan for unfair labor practices. Although she had heard the rumor from someone else, she was confident it was false. […]

Which of the following would be an example of partnering? A) selling a customized bus to the CEO of the bus manufacturer B) renting customized buses to corporate customers through a car service agency that services corporations C) using the […]

According to the text, emotional intelligence can most likely be increased by using: A) partnering relationships B) transactional sales methods C) non-verbal communication tools D) empathizing techniques E) self-development activities You have covered the major points of the sales presentation […]