Ceasar - ENT 2113 Final

Characteristics of an entrepreneurial firm start-up include all except

having over 100 employees

Established businesses are often ________ to buy from a start-up small business.

hesitant

The process of generating ideas should occur in a(n) ________ manner and not in a(n) ________ fashion.

interactive; linear

Brainstorming works well in ________ groups.

Informal

Which of the following statements is true of the commission compensation system?

It creates frustration when a firm either does or does not change a commission program to reflect the growth of the firm.

Which of the following statements is true of the Civil Rights Act?

It currently applies to all firms with more than 25 mployees.

Which of the following statements is true of the Fair Labor Standards Act (FLSA)?

It requires that all nonexempt employees who work over 40 hours a week should be paid at the rate of time and a half.

A company seeks to have inventory present only shortly before it is used. This method of inventory control is called

Just-in-time inventory.

Which of the following statements is true of a performance review in an entrepreneurial business?

The formal conversation with a worker who is doing a good job and appreciating his or her work is a form of compensation.

Identify a true statement about the potential founder of a new business.

The founder of a new business needs to be intimately involved in its designing, funding, and running.

In the context of legal forms of business, which of the following is an area in which sole proprietorships differ from general partnerships?

The possibility of bringing in new equity partners.

In the context of entrepreneurship around the world, identify a true statement about microloans.

The success of such loans has been substantial, with great strides being made in many desperately poor nations.

A small business owner should be diligent in documenting the performance of employees over time. This helps the owner to terminate an employee for poor performance and also efficiently handle any legal issues that may arise.

True

Banks will lend money for the establishment and maintenance of inventory by arranging a revolving line of credit.

True

Charles Wilson, secretary of defense for President Eisenhower, stated that "what is good for General Motors is good for the nation."

True

Damage from floods and earthquakes is covered by a special form of insurance coverage. A small business owner, who chooses, may purchase it in addition to basic insurance.

True

Debt, a source of nonequity funding, allows a new business to handle the disparity between when goods must be purchased and when money will be received from a customer to pay for those goods.

True

James and Mary own a business. When they pay themselves an advance in salary or a bonus, it is called a(n) ________.

draw

Entrepreneurial businesses fail to provide a means to meet the varied demands that individuals face in a society.

False

An employee cannot sue a small business owner for injury, if the individual accepts ________.

workers' compensation

Human resources, as defined in economics, is the processing of employees in monetary terms.

False

If a job is more central to an organization and has higher required skill levels than other positions, then the importance of employee references decreases.

False

In a small firm, the cost of health insurance per employee will be equal to that of a large firm.

False

In the context of developing a quality business idea, the first step that an entrepreneur should take is assess their ability to fill gaps in the market.

False

In the context of risk tolerance, most new business owners must set their risk tolerance based on the average level of risk in their specific market or industry.

False

Large firms can fill niches that small companies cannot afford to fill.

False

OSHA stands for Office Standards and Health Administration.

False

The development plan of a venture capital start-up is oriented around positive cash flow.

False

The last column of a gap analysis is used to list the categories that are used to analyze each idea.

False

When brainstorming, the true potential for each idea is often fully evaluated before the process moves onto generating the next one.

False

In the context of legal forms of business, identify a true statement about limited liability partnership (LLP).

In a limited liability partnership, limited partners can work at the firm but not be active in its management.

A petty cash fund operates like a bank savings account.

True

A problem with having a line of credit to purchase inventory is that a business tends to carry old and outdated inventory on the books.

True

The term ________ refers to the fact that women, like minorities, may be hired by large firms but experience limits placed on their advancement.

"glass ceiling"

The government regulates the employment of children under the age of ________.

16

What is the percentage of self-employed people in the workforce?

20

A program that allows employees to contribute to their retirement on a tax-free basis is ________.

401(k)

What is the major difference between a board of directors and a board of advisors?

A board of directors has fiduciary responsibility, whereas a board of advisors advises the firm.

Identify an accurate statement about the hybrid compensation system.

An entrepreneur should provide bonuses in a timely manner that is relevant to the individuals in the firm and within the realities and constraints of the business.

In the context of financing tools available to new businesses, identify a major disadvantage to asset leasing.

A new business might spend more money on leasing equipment over time than if it had bought the equipment outright.

Several successful businesspeople establish a partnership with each other. They combine their financial resources and use the resultant pool of resources to make equity investments in various high-growth new undertakings. In the context of equity funding, the partnership and the pooled resources of the businesspeople are best described as

A venture capital fund.

In the context of nonequity funding, identify a true statement about loans.

Debt holders have a right to a firm's assets if the firm fails to pay off their loans.

Identify a true statement about the process of generating business ideas.

After analysis, entrepreneurs may change their ideas even if they initially thought that their ideas would be successful.

________ states that individuals make decisions that maximize their own individual benefits.

Agency theory

________ lead(s) to a condition where a single firm making 100 percent of the product is the most efficient.

Economies of scale

Which personality test believes that a person is the result of all experiences in his or her life?

Enneagram

Which of the following was the outcome of the Great Depression of the 1930s?

Entrepreneurial business as a percentage of the U.S. economic output began to decline.

Covore Inc., a start-up firm, receives the majority of the funds it requires to begin its operations from five individuals. In exchange for these funds, each individual receives a share of ownership in the firm. The funds provided to Covore Inc. by the individuals are an example of ________.

Equity investment

A business that chooses to form a corporation must have a board of directors. In new small corporations, the board of directors and shareholders must be different individuals.

False

A copyright can only be claimed on creative works if they are published or made available for public consumption.

False

A small business start-up is typically oriented toward the personal goals of venture capitalists.

False

A trademark cannot be renewed once it has been issued even when the firm or the product is active.

False

An entrepreneur needs to set limits to how much time he or she spends on a business for it to be successful.

False

In the context of legal forms of business, identify a benefit of an Subchapter S Corporation over a Subchapter C Corporation.

An Subchapter S Corporation has limitations in the number and type of shareholders unlike a Subchapter C Corporation

Sonor Designs is a small business that makes greeting cards. Because of the small scale of the firm's operations, it cannot afford to purchase the expensive printers it needs to make greeting cards. Instead, it rents the printers from another organization. In the context of business financing, Sonor Designs renting essential business equipment from another company is an example of

Asset leasing

________ is a rational decision-making process that is constrained by our experiences, history, and culture.

Bounded rationality

In the context of business risks, how can an entrepreneur identify competitors to a new potential business?

By observing what potential customers do to satisfy their current needs or wants.

Before establishing a new business, the first thing founders should do is

List their personal skill sets

In the context of business designs, one of the advantages of a corporation is that when it suffers losses, the founders will

Lose only their investment in the business rather than their life's savings.

Which of the following personality tests is based on the philosophy of Carl Jung?

Myers-Briggs

In contrast to the role of leadership in a typical large organization, the founder of a new entrepreneurial business tends to play a very critical role because

The concentration of knwoledge tends to be with her or him

A firm sets up a low level of salary but offers to share a percentage of its profits at the end of the year. What is this called?

Profit Sharing

In the context of inventory accounts, the difference between what is sold by a business and what was brought into it is known as ________.

Shrinkage

Which of the following experiences can entrepreneurs evaluate when generating business ideas based on their education?

The courses they took that were particularly enjoyable

Marsciva Technologies is an emerging business. The firm considers the owners to be employees of the firm and therefore pays them salaries and bonuses. To reduce corporate tax, the owners of Marsciva Technologies pay themselves nearly all the profits generated so that very little actual profits are reported by the firm. Based on these characteristics, Marsciva Technologies is most likely a

Subchapter C Corporation

Borealis Computing is a small start-up firm that needs to purchase essential equipment and supplies to begin operations. Gencent LLC, a larger firm, offers to finance Borealis Computing's purchases. Under their agreement, Borealis Computing will repay Gencent LLC overtime at a specified interest rate. In the context of nonequity funding, Gencent LLC's financing of Borealis Computing's purchases is an example of ________.

Supplier credit

Which of the following can be a threat to operational financing?

Swift expansion plans

Which of the following laws states an employer cannot discriminate in pay to men and women who do the same job?

The Equal Pay Act

Which of the following is true of robber barons in the context of the history of entrepreneurial businesses in the United States?

They indulged in great abuses in order to succeed in their business.

Identify a defining characteristic of entrepreneurial firms.

They tend to be oriented toward the personal goals of the founder.

In the context of equity funding, identify a characteristic of venture capital funds.

They tend to invest in high-growth businesses that can cash out by being bought out by a larger company within a set period of time.

A community could have an incubator, which is a facility that houses new businesses and provides many critical services for them.

True

A difference between copyrights and patents is that copyrights apply to creative materials generated while patents cover specific innovations that are generally industrial or process-based.

True

A loan involves a contractual agreement where a business receives some amount of money that must be repaid over a specified period of time at a specified interest rate.

True

The federal General Accounting Office did an analysis of the impact of the closure of military bases and discovered that in the areas where military bases closed, the unemployment rate was less than the national average. This is because of the starting up of new small businesses in the areas.

True

The fourth column in a gap analysis is used to list the resources required for the successful operation of a business.

True

The owner must be aware of his or her own tolerance of risk and establish a business that is consistent with that tolerance.

True

The threats to sales generation schemes refer to an organization not being able to generate sufficient sales required to make it profitable.

True

A potential business owner needs to convey his or her business idea to a prospective investor or lender in ________ minutes.

Two

________ is a fund that is organized as a limited partnership.

Venture capital

In the context of risks to new businesses, identify a true statement about risk tolerance.

What constitutes a risk is determined by an entrepreneur by observing his or her own tolerances.

When a small business owner pays a commission in addition to a basic salary, it is called ________.

a hybrid compensation system

A small business owner must possess all of the following except

a sequential formula

Which of the following questions should a new business owner examine when considering leases?

a. Is there an ability to renew the lease? b. All of the answers are correct. c. What exactly is the new business owner leasing? d. Who is responsible for maintenance and improvements? b. All of the answers are correct.

What are the critical elements that an entrepreneur must solve for success?

a. being properly financed b. All of these choices are correct c. sustainable operating profit margins d. an effective sales generation model b. All of these choices are correct

What are the advantages of leasing equipment for a new business?

a. no hassles of an aging asset b. All of the answers are correct. c. beginning operations with a minimum cash outlay d. ability of the business to trade up as newer, higher-quality machines become available b. All of the answers are correct.

You should not use a cookie-cutter business plan program because

a. potential investors are often family members, which makes it critical that the entrepreneur seeks to ensure the chances of success by doing thorough planning and thinking. b. All of these choices are correct c. a good plan is best developed by the individual contemplating the business, not by a paid consultant. d. each business plan should have its own voice, feel, and presentation. b. All of these choices are correct

Which of the following information should be obtained in the application/interview process?

a. social security number b. work history c. education and training d. All of the answers are correct. d. All of the answers are correct.

In the context of entrepreneurial businesses, which of the following is an advantage that small businesses have over big businesses?

ability to produce small niche products

In the context of legal forms of business, a general partner in a limited liability partnership

has unlimited liability for any debts or judgements against the firm

Years ago, economists mistakenly predicted that small businesses would

be replaced by a small number of big businesses

Why can a small business owner make decisions quicker than a big business?

because the decision maker is both the owner and the manager of the business

In the context of entrepreneurial orientation, the presence of ________ often leads young people to be pioneers in an area, as they are not limited by the restrictions of the past.

bounded rationality

When conducting a gap analysis, the first column should include the ________.

business ideas

Carla and John enter into a partnership and form a business. Under the partnership agreement, Carla is directly responsible for the management of the firm and its liabilities. John has a minor financial stake in the firm and works there, but he is not held responsible for the taxes and debts owed by the firm. In the context of the legal forms of business, Carla and John have formed a ________,

limited liability partnership

Debt is a form of ________ funding.

nonequity

Which of the following personality tests was developed by two independent research teams who analyzed data collected from thousands of people?

the Big Five test

In the context of evaluating entrepreneurial orientation, which of the following personality tests has a bias that adults will not change their personality over time and instead hold on to the personality they develop during childhood?

the Enneagram test

Which of the following is an advantage that small firms have over large businesses?

the ability to respond quickly to changes

When forming a sole proprietorship or a partnership, the business debts are

the responsibility of the owners.