Into To Entrepreneurship Midterm Review

The most common source of debt financing is A. Commercial banks B. Factoring C. Trade credit D. Finance companies

A. Commercial banks

The triple bottom line focuses on all of the following except A. Precedence B. Profits C. People D. The planet

A. Precedence

___ is one of the disadvantages of going public A. Shareholder pressure B. Form 8-K C. Value D. Liquidity

A. Shareholder pressure

Use of debt to finance a new venture involves a payback of the funds plus an interest fee (interest) for the use of money A. True B. False

A. True

The terms, entrepreneur and small-business owner are never used interchangeably A. True B. False

B. False

The venture capital pool is rapidly declining due to overfunding A. True B. False

B. False

The four types of innovation are A. Synthesis, extension, retention, and analysis B. Invention, extension, synthesis, and duplication C. Analysis, synthesis, duplication, and retention D. Extension, retention, analysis, and duplication

B. Invention, extension, synthesis, and duplication

Sustaining corporate entrepreneurship requires A. Keeping up with market trends B. Keeping the corporate vision strong C. Granting equal pay raises D. Maximizing profits

B. Keeping the corporate vision strong

When going public with public offerings an advantage might be the A. Company's size B. Product price C. Size of the company's capital amount D. Company's market share

C. Size of the company's capital amount

There is no single definition of entrepreneur A. True B. False

B. False

In starting or buying a new business, the higher the rewards, the A. Greater the risk B. Smaller the enjoyment C. Greater the size of business D. More minimal the risk

A. Greater the risk

Entrepreneurs typically have enough confidence to believe that they can make a difference in the final outcome of their ventures A. True B. False

A. True

Entrepreneurs usually have an internal locus of control A. True B. False

A. True

Generally, the larger and more successful the franchisor, the greater the franchise fee that is charged A. True B. False

A. True

In the model of sustained corporate entrepreneurship discussed in the text, a transformational trigger can be internal or external to the company A. True B. False

A. True

Innovation is the process by which entrepreneurs convert opportunities into marketable ideas A. True B. False

A. True

New and smaller firms obtain more patents per sale than do larger firms A. True B. False

A. True

The maverick entrepreneur who avoids reaching out and finding help is a myth of the past A. True B. False

A. True

The way to approach a new business venture is to design a good or service that is unique A. True B. False

A. True

With persistent problem solving, entrepreneurs A. Must daydream all day B. Thinking anything is possible C. Can't multitask D. Are always working

B. Thinking anything is possible

It takes ___ , not ___ , to innovate successfully A. rest; work B. work; genius C. genius; work D. work; rest

B. work; genius

A franchise is any arrangement where the owner has licensed others to sell goods or services by which of the following? A. Contact B. Patent C. Trademark D. License

C. Trademark

The four phases, in order, in the creative process are A. Evaluation and implementation, idea experience, incubation, and background or knowledge accumulation B. Background or knowledge accumulation, incubation, idea experience, and evaluation and implementation C. Idea experience, background or knowledge accumulation, incubation, and evaluation and implementation D. Incubation, background or knowledge accumulation, idea experience, and evaluation and implementation

B. Background or knowledge accumulation, incubation, idea experience, and evaluation and implementation

Which of the following terms describes a possible leadership style for ecologically innovative firms? A. Social impact investing B. Ecovision C. Ecopreneurship D. Triple bottom line

B. Ecovision

General sources for market feasibility analysis include A. Reliability studies B. Pricing data C. Statistical analyses D. Supplier data

B. Pricing data

Successful entrepreneurs are able to identify and implement ideas that A. Are workable and that they have the skills to implement B. Will in instant approval from customers C. Will make money D. Are least feasible

A. Are workable and that they have the skills to implement

Venture capitalists are experienced professionals who provide a full range of services for new ventures including A. Management consulting B. Supplying labor for start-up C. R&D knowledge D. Market research and strategy for pricing

A. Management consulting

Business brokers specialize in business opportunities, and can provide leads in assistance and finding a venture for sale A. True B. False.

A. True

Commitment, determination, and perseverance are just a few characteristics one needs to become a successful entrepreneur A. True B. False

A. True

Each and every person has the potential and free choice to pursue a career as an entrepreneur A. True B. False

A. True

Entrepreneurs are aggressive catalysts for change within the marketplace A. True B. False

A. True

All of the following are methods for going international except A. Importing B. Foreign reclamation C. International alliances D. Licensing

B. Foreign reclamation

Researchers have described a "fully developed new firm" with a number of characteristics, including A. Minimal hiring B. Full-time commitment C. Plans to hire one or more individuals D. Informal financial support

B. Full-time commitment

Most entrepreneurs should be categorized as A. Inventors B. Innovators C. Lucky D. Wealthy

B. Innovators

Many new ventures find that debt financing is A. Not an important consideration B. Necessary C. A minor source of funds D. A waste of time

B. Necessary

Every person has the ___ and ___ to pursue a career as an entrepreneur A. Stubbornness; stupidity B. Potential; free choice C. Rights; regulations D. Obligation; duty

B. Potential; free choice

Which of the following is not a type of debt financing? A. Accounts receivable B. Private placement C. Trade credit D. Finance companies

B. Private placement

Which of the following is a factor contributing to new-venture failure? A. Family issues B. Product/market problems C. Personality clashes D. Good management-poor product

B. Product/market problems

Typically, when faced with failure, entrepreneurs A. Become outraged and take a short vacation B. Remain optimistic and view it as a learning experience C. Resign D. Blame top management

B. Remain optimistic and view it as a learning experience

Which of the following is not critical to a product's success? A. Objectivity B. Size C. Timing D. Marketing approach

B. Size

Which of the following would be most commonly used for long-term financing? A. Insurance companies B. Trade credit C. Leasing companies D. Finance companies

A. Insurance companies

The comprehensive feasibility analysis approach is closely related to the preparation of a thorough business plan. A. True B. False

A. True

The innovation process allows people to subconsciously mull over the information they have gathered A. True B. False

A. True

After the prospective entrepreneur has gathered all necessary information, it is up to the ___ to make the final decision on the matter A. Board of directors B. Entrepreneur C. Legal advisors D. Entrepreneur and his or her financial advisor

B. Entrepreneur

A code of ___ is a statement of ethical practices or guidelines to which an enterprise adheres A. Conduct B. Honor C. Silence D. Ethics

A. Conduct

Three specific phases that a new venture goes through are A. Prestart-up, start-up, and poststart-up B. Prestart-up, start-up, and evaluation C. Beginning start-up, start-up, and ending start-up D. Start-up, poststart-up, and evaluation

A. Prestart-up, start-up, and poststart-up

A disadvantage of debt financing is A. Regular interest payments B. Possible cash flow enhancement C. Relinquishment if ownership D. Inhibition if growth and development due to equity investments

A. Regular interest payments

Which of the following is not a common myth about entrepreneurs? A. Entrepreneurs are academic and social misfits B. Entrepreneurs today are considered heroes C. Entrepreneurs are doers, not thinkers D. All you need to be an entrepreneur is money

B. Entrepreneurs today are considered heroes

A new venture goes through five specific phases A. True B. False

B. False

An entrepreneur's decision to ignore the market is safe if he or she is sure that the idea will be a success A. True B. False

B. False

Corporate entrepreneurs should be restricted to the resources of their own divisions of the corporation A. True B. False

B. False

Corporate entrepreneurship and the desire for activity inside enterprises have been forced in smaller corporation, not in larger ones such as AT&T or Procter and Gamble A. True B. False

B. False

Employees shouldn't except feedback on their entrepreneurial ideas A. True B. False

B. False

Entrepreneurs are doers, not thinkers A. True B. False

B. False

Entrepreneurs are pessimists who only see the cup half empty rather than half full A. True B. False

B. False

For-profit enterprises have yet to make significant contributions to the world of social entrepreneurship A. True B. False

B. False

Innovation is planned and predictable A. True B. False

B. False

Large firms, as opposed to entrepreneurs, are the aggressive catalyst for change in the world of business A. True B. False

B. False

Only a small number of informal risk capitalists are in the market today A. True B. False

B. False

Social entrepreneurship is rarely a vehicle for sustainable development A. True B. False

B. False

Successful global start-ups, or entrepreneurial businesses that are "born global," surprisingly often lack internationally experienced management A. True B. False

B. False

Sustainable development is an important, but not necessarily the most prominent, topic of our time A. True B. False

B. False

The elimination of time and effort associated with starting a company is an advantage of acquiring an ongoing venture A. True B. False

B. False

The term risk versus loss refers to the amount of return for funds invested A. True B. False

B. False

Entrepreneurs are best characterized as A. Hard to get along with B. Aggressive catalysts for change C. Good managers D. Not fitting in to an ordinary workplace

B. Aggressive catalysts for change

The franchiser's responsibility does not include providing A. Symbols and logos B. A company name C. A business relationship D. Management and training

C. A business relationship

Which of the following is an entrepreneurial characteristic? A. High risk taking B. Superior intelligence C. Strong drive to succeed D. Low morals

C. A strong drive to succeed

Which of the following is a question that should not be sidestepped when buying a business? A. What types of customers does this store attract? B. Where should the business be located? C. Are there hidden problems that exist in the operation? D. What pricing strategy should the firm use?

C. Are there hidden problems that exist in the operation?

Which of the following individuals has the opportunity to lead and "run" with an idea? A. Visionary B. Manager C. Champion D. Department manager

C. Champion

Which of the following is a type of equity financing? A. Loan without warrants B. Loan with warrants C. Common stock D. Convertible debentures

C. Common stock

Managerial problems include A. Assuming debt too early B. Unclear business definition C. Concept of a team approach D. Venture capital relationship problems

C. Concept of a team approach

Which of the following statements about entrepreneurs is true? A. Ignorance is bliss for an entrepreneur B. All you need to be an entrepreneur is money C. Entrepreneurs are doers and thinkers D. Inheriting a business is the best way to become an entrepreneur

C. Entrepreneurs are doers and thinkers

Entrepreneurs always A. Quit school and devote themselves to being an entrepreneur B. Start their business at a young age C. Generate ideas and plan for their implementation D. Use credit cards to start their own businesses

C. Generate ideas and plan for their implementation

Which of the following characteristics is most important to an entrepreneur? A. Friendliness B. Neatness C. Management skills D. Having a nice office

C. Management skills

"Piggybacking" one's way into a new business involves using a(n) ___ approach A. Old-old B. New-new C. New-old D. Old-new

C. New-old

When buying a business, which of the following is not a factor to consider when investigating the competition? A. Reduction of market share B. Effect of price competition on profits C. Number of employees D. Advertising costs

C. Number of employees

Which of the following characteristic(s) that propel entrepreneurs into success can be exhibited to the "extreme"? A. High energy B. Desire for success C. Overbearing need for control D. Optimism

C. Overbearing need for control

The first five steps for entering the international marketplace A. Securing adequate financing B. Filing the proper documents C. Preparing a feasibility study D. Conducting research

D. Conducting research

The person who purchases the franchise is usually required to do all of the following except A. Maintain a specified quality of performance B. To pay a fee C. Invest money in the operation D. Design a logo for the unit

D. Design a logo for the unit

A common pitfall in selecting a new venture is A. Real insight into the market B. Having a good idea C. Proper objective evaluation D. Poor financial understanding

D. Poor financial understanding

Which of the following is an example of an intangible asset? A. Inventory B. Machinery C. Plant facility D. Reputation

D. Reputation

Rewards should be based upon ___ to encourage the desired behavior A. Attitude B. Morale C. Seniority D. Results

D. Results

A person can develop their own creativity by A. Taking up a new hobby B. Focusing on making money C. Quitting a boring job D. Seeing new and different relationships in people, objects, and places around them

D. Seeing new and different relationships in people, objects, and places around them

One trait not common in entrepreneurs is being A. Independent, yet able to build strong teams B. A problem solver C. Creative and innovative D. Structured

D. Structured

Entrepreneurs will always be A. Hindered by lack of funding B. A little quirky C. A key factor in the stability of the small-business sector D. The major source of job creation and innovation in any economy

D. The major source of job creation and innovation in any economy

A clear pattern among successful entrepreneurs is A. Setting goals that are just out of reach B. Not fitting in to traditional organizations C. The fear of failure common to all people D. Their focus on opportunity rather than strategy

D. Their focus on opportunity rather than strategy

Which of the following would be most commonly used for short-term financing? A. Leasing companies B. Insurance companies C. Finance companies D. Trade credit

D. Trade credit

Which of the following would not be considered as encouraging to an entrepreneurial environment? A. Promotion of entrepreneurship through experimentation B. Top management sponsorship of entrepreneurship C. Identifying potential entrepreneurs D. Uniform compensation

D. Uniform compensation

Which of the following terms would be associated with the left hemisphere of the brain? A. Abstract B. Nonrational C. Imagining D. Nonverbal

A. Abstract

Which of the following statements is true? A. Both sides of the brain are important to the creative process B. The left brain is more important in the creative process than the right brain C. Motivation, not the brain, is the key to the creative process D. The right brain is more important in the creative process than the left brain

A. Both sides of the brain are important to the creative process

Shifts in consumer tastes and attitudes are an example of A. Industry and market changes B. Problems for the entrepreneur C. An infeasible opportunity D. The fickle consumer

A. Industry and market changes

Which of the following is considered a myth of innovation? A. Innovation relies on blue-sky ideas B. Innovations are unpredictable C. Small projects develop into successful innovations D. Creativity can be learned

A. Innovation relies on blue-sky ideas

Which of the following would be most commonly used for intermediate-term financing? A. Leading companies B. Finance companies C. Insurance companies D. Trade credit

A. Leasing companies

The incubation process involves A. Letting the subconscious work B. Changing jobs C. Talking with friends D. Working harder

A. Letting the subconscious work

Flexibility, reliability, and safety are all examples of A. Technical feasibility B. Market feasibility C. A good product D. Assessment of the entrepreneurial profile

A. Technical feasibility

A good trait for an entrepreneur is to be a calculated risk taker A. True B. False

A. True

A product does not have to be patented in order to be introduced into the marketplace A. True B. False

A. True

Peter Drucker has stated that successful innovators must look, ask, and listen A. True B. False

A. True

The actual cost of "opening the doors" of a franchise establishment can be more than $200,000 A. True B. False

A. True

Entrepreneurs are the major source of innovation and job creation in the economy A. True B. False

A. True