ENT4900 Chapter 9
Describe the five key factors in locating a brick-and-mortar startup.
- Customer accessibility is a key location factor in industries with high transportation costs, as well as those that must provide handy access for targeted customers to avoid losing those customers to more conveniently located competitors. - Business environment factors affecting the location decision are climate, competition, legal requirements, and the tax structure. - Availability of resources such as raw materials, suitable labor, crucial suppliers, and transportation can be important to location decisions. - Though it can interfere with sound decision making, the entrepreneur's personal preference is a practical consideration in selecting a location. - An appropriate site must be available and priced within the entrepreneur's budget.
Understand the potential benefits of locating a startup on the Internet.
- E-commerce offers small firms the opportunity to compete with bigger companies on a more level playing field. - Internet operations can help small firms with early cash flow problems by compressing the sales cycle. - Business-to-business (B2B) companies generate far more sales than ventures following alternative models. - The three main advantages of online business-to-consumer (B2C) firms are convenient to use, immediate transactions, and continuous access to products and services. - Internet auction sites, like eBay, are based on the consumer-to-consumer (C2C) model and can help even the smallest of businesses access a worldwide market with great convenience. - The role of a website can range from merely offering information and content to permitting the buying and selling of products and services online. - Emerging platforms for online ventures include blogging, podcasting, and creating a following on YouTube or Pinterest to generate revenue from ads and sponsorships, donations, subscription charges, or fees for access to live events. - Internet-based businesses can be started on a part-time basis, which reduces the personal risk of the entrepreneur if the venture should fail.
Recognize both the attraction and the challenges of creating a home-based startup.
- Home-based businesses are started both for financial reasons and to accommodate family lifestyle considerations. - Operating a business at home can pose challenges beyond family and business conflict, particularly in the areas of professional image and legal considerations. - Technology, especially the Web, has made it possible to operate many types of businesses from almost any location.
Discuss the challenges of designing and equipping a physical facility.
- The general suitability of a building depends on the functional requirements of the business; it should be neither too large and extravagant nor too small and restrictive. - The comfort, convenience, and safety of the business's employees and customers must not be overlooked. - Deciding whether to purchase or lease equipment is an important choice many entrepreneurs face. - Most small manufacturing firms must use general-purpose equipment, but some can use special-purpose equipment for specialized operations. - Small retailers must have merchandise display racks and counters, storage racks, shelving, mirrors, shopping carts, cash registers, and other equipment that facilitates selling. - Fixtures and other retailing equipment should create an atmosphere appropriate for customers in the retailer's target market. - Entrepreneurs should select office equipment that reflects the latest advances in technology applicable to a particular business. - All new ventures, regardless of their function, should project an image that is appropriate to and supportive of the business and its intentions.
A _____ is simply a short-term loan to help with temporary needs, such as seasonal increases in inventory. a. line of credit b. cash budget c. current asset d. long-term debt
A
A _____ price strategy sets prices for products or services at high levels for a limited period of time. a. skimming b. penetration c. follow-the-leader d. variable
A
A leveraged buyout depends on adequate future _____ and entails a high level of _____. a. cash flow; debt b. trust; product innovation c. legal risk; political favors d. equity; shareholder goodwill
A
A leveraged buyout involving the purchase of a company with the intent of selling off its assets is called a. bust-up LBO. b. ESOP. c. build-up LBO. d. MBO.
A
A major component of the consumer behavior model is psychological influence. a. True b. False
A
A product _____ is the lowest common denominator in a company's product mix. a. item b. mix c. strategy d. line
A
A profitable company does not necessarily have positive cash flows. a. True b. False
A
According to recent research, 91 percent of businesses with 11 or more employees and 50 percent of those with 10 or fewer employees said they had a CRM system already in place, which represents impressive growth in usage over previous years. a. True b. False
A
All of the following are primary SBA program's EXCEPT: a. the Venture Capital program. b. the 7(a) Loan Guaranty program. c. the Certified Development Company program. d. the Small Business Innovation Research program.
A
All of the following are true about cost of goods sold EXCEPT: a. it is an operating expense. b. it can be variable. c. it is the cost of producing a firm's products and services. d. it can be fixed.
A
As long as the owner's rate of return is greater than the cost of debt, return on equity will increase as the company uses more debt. a. True b. False
A
Conflicts are more likely to occur if an entrepreneur remains with the company after the sale. a. True b. False
A
Costs that remain constant at different levels of quantity sold are called a. fixed costs. b. variable costs. c. average costs. d. markup costs
A
For every dollar of assets needed, there must be a corresponding dollar of financing. a. True b. False
A
General-purpose equipment permits cost reduction in industries in which the technology is fully established and in which a capacity is assured by high sales volume. a. True b. False
A
Having positive net profits in an income statement does not necessarily mean that a firm has generated positive cash flows. a. True b. False
A
Interest expense is deducted from the _____ to arrive at the company's profits before taxes. a. operating profits b. gross profits c. net profits d. cost of goods sold
A
Monthly forecasts should be avoided for any time frames beyond one year. a. True b. False
A
Need recognition occurs when a consumer realizes that his or her current state of affairs differs significantly from some ideal state. a. True b. False
A
Net working capital is a measure of a company's a. liquidity. b. long-term asset structure. c. profitability. d. asset turnover capacity.
A
Packaging, branding, labeling, and warranties are part of a firm's total product offering. a. True b. False
A
Raising new capital through equity financing would mean giving up a part of the firm's ownership, and most owners of small firms resist giving up control to outsiders. a. True b. False
A
Successful CRM programs include good transactional relationships with customers and knowledge of customer behavior. a. True b. False
A
The effect that a change in price has on the quantity demanded is called the a. elasticity of demand. b. break-even point. c. cost differential. d. adaptive pricing.
A
The five Cs of credit consist of all of the following EXCEPT: a. credit card. b. character. c. capacity. d. capital.
A
The four basic ways to harvest an investment in a privately owned company are all of these EXCEPT: a. buying another firm. b. distributing the cash flows generated by the business to its owners instead of reinvesting the cash. c. offering stock to the public through an initial public offering. d. undertaking a private equity recapitalization.
A
The most effective approach to collecting past-due accounts is to a. remind the debtor that his or her credit rating may be impaired. b. contract with a collection agency immediately. c. endorse a consolidation loan for the debtor. d. negotiate extended payments from the debtor.
A
The type of assets that can quickly be converted into cash are called a. current assets. b. fixed assets. c. property, plant, and equipment. d. other assets.
A
Top Hats Limited routinely sets high prices for their hats to convey an image of high quality. This refers to a. prestige pricing. b. variable pricing. c. fixed pricing. d. average pricing.
A
Total assets less outstanding debt must always equal ownership equity. a. True b. False
A
Transactional relationships occur between the customer and a small business. a. True b. False
A
Unfortunately, there is no formula for determining the price of a private company. a. True b. False
A
Value is created when a firm's return on invested capital is _____ the investors' opportunity cost of funds. a. greater than b. less than c. equal to d. similar to
A
When consumers develop an emotional connection to firms, they respond more positively. a. True b. False
A
Which of the following shows the profits and losses of a firm's operations over a period of time? a. income statement b. balance sheet c. statement of cash flow d. statement of financial position
A
Which of the following would most CEOs state as being the primary motivation for going public with stock? a. Raise capital for growth b. Facilitate selling the company c. Establish a market value for the firm d. Enhance the firm's ability to raise capital
A
Which of these is an informal agreement or understanding between the borrower and the bank as to the maximum amount of credit the bank will provide the borrower at any one time? a. Line of credit b. Term loan c. Chattel mortgage d. Mortgage
A
Which technique is a method to forecast asset investments and financing requirements? a. percentage-of-sales b. net working capital c. spontaneous debt financing d. cash budget
A
____ is a loan for which certain items of inventory or other movable property serve as collateral. a. Chattel mortgage b. Line of credit c. Estate mortgage d. Term loan
A
_____ are expressed either as a percentage of the selling price or the cost. a. Markups b. Break-even points c. Prestige pricing d. Elastic demand
A
business-to-business (B2B) model
A business model based on selling to business customers electronically.
business-to-consumer (B2C) model
A business model based on selling to final consumers electronically.
transaction-based model
A business model in which a website provides a mechanism for buying or selling products or services.
content-based model
A business model in which a website provides information (content) that attracts visitors, usually with the hope of generating revenue through advertising or by directing those visitors to other websites.
information-based model
A business model in which a website simply provides information about a business, its products, and other related matters.
consumer-to-consumer (C2C) model
A business model usually set up around Internet auction sites that allow individuals and companies to list items available for sale to potential bidders.
home-based business
A business that maintains its primary facility in the residence of its owner.
business incubator
A facility that provides shared space, services, and management assistance to new businesses.
A profit and loss statement is a financial report that shows the sources of a firm's cash and its uses of the cash. a. True b. False
B
A(n) _____ categorizes accounts receivable based on the length of time they have been outstanding. a. trade credit b. aging schedule c. revolving charge account d. bad-debt ratio
B
A(n) _____ is a group of brands that a customer is both aware of and willing to consider as a solution to a purchase need. a. reference group b. evoked set c. perceptual categorization d. social classes
B
About _____ percent of customers say they have walked out of a store in the previous year because of poor customer service. a. 24 b. 64 c. 15 d. 75
B
After the completion of the sale, the relationship with the client does not matter to the entrepreneur. a. True b. False
B
All of the following are categories of product strategy alternatives of a small business EXCEPT: a. one product/ one market. b. one product/ modified market. c. multiple products/ multiple markets. d. modified products/ one market.
B
All of the following are economic benefits of maintaining relationships with current customers EXCEPT: a. happy customers refer friends and colleagues. b. new customers increase profits more than current customers. c. order-processing cost are less for returning customers. d. long-time customers spend more money than new customers.
B
All of the following are stages in the product life cycle EXCEPT: a. growth. b. deployment. c. maturity. d. decline.
B
An initial public offering (IPO) occurs when a company sells stock to selected insiders. a. True b. False
B
At the _____ stage of the product life cycle, profits reach their peak. a. introduction b. growth c. maturity d. decline
B
Fixed assets include all of the following EXCEPT: a. land. b. inventory. c. trucks. d. machinery.
B
Fixed costs are also known as a. variable costs. b. operating expenses. c. average prices. d. elastic demands.
B
For all practical purposes, cash flows and profits are the same thing and can be used interchangeably. a. True b. False
B
For entrepreneurs, an indirect channel of distribution is sometimes preferable because it provides more control. a. True b. False
B
Fortunately, an entrepreneur can cash out immediately after the completion of the IPO. a. True b. False
B
Given the advances in technology, the cost of accepting major credit cards for payment over the internet has decreased. a. True b. False
B
Given the dynamic nature of online business, internet companies are discovering that frequent price changes do not work to their benefit. a. True b. False
B
Harvesting is simply selling and leaving a business. a. True b. False
B
In a harvest strategy, financial questions associated with the sale of a firm include how to value the firm and how will this affect the firm's stock. a. True b. False
B
In practice, credit cards are insignificant source of financing for all entrepreneurs, particularly early in the game. a. True b. False
B
Owners' equity in a business comes from investments the owners make in the business and a. inventory. b. retained earnings. c. spontaneous debt financing. d. cash resources.
B
Packaging, branding, labeling, and warranties are part of a firm's total product offering. a. True b. False
B
Penetration pricing and skimming are long-term strategies used when new products are first introduced into the market. a. True b. False
B
Perception is the starting point for all behavior. a. True b. False
B
Studies have shown that small entrepreneurial firms produce _____ the innovations per employee as large firms. a. triple b. double c. quadruple d. half
B
The _____ is the most important planning document in the life of a small company. a. pro forma financial statement b. cash budget c. balance sheet d. income statement
B
The _____ requires every food product covered by the law to have a standard nutrition label. a. Consumer Product Safety Commission b. Nutrition Labeling and Education Act c. Consumer Product Improvement Act d. Food and Drug Administration
B
The best financial ratio to determine a company's ability to pay debt as it come due is the _____ ratio. a. debt b. current c. liquidity d. activity
B
The income statement and the cash flow statement complement each other to give an overall picture of the firm's financial situation. a. True b. False
B
To convert the company's income statement from accrual basis to cash basis, we take two steps: 1) add back _____ to net profits and 2) subtract any uncollected sales and payments for inventory. a. total assets b. depreciation c. cash flows d. retained earnings
B
Total asset turnover equal sales divided by a. operating profits. b. total assets. c. total debt. d. debt ratio.
B
Unfortunately for a business, preparing historical financial statements such as income statements, balance sheets, and cash flow statements is a very difficult task. a. True b. False
B
Unfortunately, research findings suggest that managing customer relationships pays minimal dividends. a. True b. False
B
Unfortunately, strategic decisions about growth, innovation, and product development are seldom made within the guidelines and constraints of the legal environment of the marketplace. a. True b. False
B
What is it called when a private firm sells its stock for the first time to the general public? a. LBO b. IPO c. SEC d. ESOP
B
What is the customary time period for trade credit? a. 7 days b. 30 days c. 60 days d. 90 days
B
When harvesting a firm, getting professional advice is helpful but not vital to the process. a. True b. False
B
Which of the following is NOT true of loyal customers? a. They buy more expensive products. b. reacting more to price increases. c. encouraging their friends to buy the same products. d. engaging in other behaviors that tend to enhance a firm's profits.
B
Which of these are groups of individuals who form limited partnerships for the purpose of raising capital from large institutional investors? a. bankers b. formal venture capitalists c. small business entrepreneurs d. business angels
B
Which of these is the rate of return that could be earned on an investment of similar risk? a. seller financing b. opportunity cost of funds c. ESOP d. private equity recapitalization
B
Which stage of new product development entails sketching out the plan for branding, packaging, and other supporting efforts, such as pricing and promotion? a. idea accumulation b. development of the physical product c. business analysis d. product testing
B
Working with a limited amount of capital makes forecasting important because you have more room for error. a. True b. False
B
You do not need to know a firm's financial position at the beginning of the year to fully understand how that firm performed during that year. a. True b. False
B
____ is the extent to which a good or service is perceived by its customer to meet his or her needs or wants and is measured by a customer's willingness to pay for it.
B
____ measures the degree to which a firm has sufficient working capital available to meet maturing debt obligations. a. Percentage-of-sales b. Liquidity c. Debt ratio d. Spontaneous financing
B
_____ are divisions in a society having different levels of social prestige. a. Reference groups b. Social classes c. Opinion leaders d. Perception classes
B
_____ consist of payments due from a firm's customers. a. Accounts payable b. Accounts receivable c. Accrued expenses d. Inventory
B
_____ equals the price of the product or service times the number of units sold or the amount of service rendered. a. Cost of goods sold b. Amount of sales c. Operating expenses d. Interest expenses
B
All of the following are e-commerce business models EXCEPT? a. B2C b. Auction site c. B2B d. B2A
B2A
A brand _____ is a tangible component of brand identity that cannot be verbalized. a. image b. name c. mark d. letters
C
A group leader who plays a key communications role among peers is called a(n) _____. a. reference group member b. peer perceiver c. opinion leader d. cultural leader
C
A more recent development in acquisitions is the _____ which involves pulling together a group of smaller firms to create a larger enterprise that might eventually be sold or taken public via an initial public offering. a. bust-up LBO b. IPO c. build-up LBO d. CMO
C
A product or service is said to have a(n) _____ if an increase in its price lowers demand for the product or service or a decrease in its price raises demand. a. inelastic demand b. break-even supply c. elastic demand d. bad debt ratio
C
A risky way to finance is through a. being an angel. b. equity. c. debt. d. returning money borrowed.
C
ABC Financing provides a combination of debt and equity to the business that allows the entrepreneur to cash out part of his or her investment in the company. This refers to a a. bust-up LBO. b. build-up LBO. c. private equity recapitalization. d. ESOP.
C
All of the following are purposes of pro forma financial statements EXCEPT: a. to project sales-expenses relationship for a venture. b. to project how profitable a firm can expect to be. c. to project the economic stability of industry. d. to project a firm's cash flow and where it will come from.
C
All of the following are reasons a small business may or may not decide to sell on credit EXCEPT: a. type of business. b. credit policies of competitors. c. political conditions. d. ages of customers.
C
All of the following are types of bank loans EXCEPT: a. lines of credit. b. term loan. c. equity. d. mortgage.
C
All of the following tactics represent bootstrapping EXCEPT: a. leasing instead of buying. b. utilizing "just-in-time" inventory strategy. c. "floating" checks. d. collecting the money owed the firm prior to having to pay its bills.
C
All the following are good suggestions for financial forecasting EXCEPT: a. using clear assumptions about marketing and pricing plans when creating the financial forecast for the current year. b. avoiding the use of unrealistic profit margins. c. focusing on the development of the income statement and avoid the balance sheet and cash flow statement until the second year. d. avoiding providing too much financial data.
C
The conventional method of measuring the firm's liquidity is the a. debt ratio. b. cash flow statement. c. current ratio. d. asset turnover ratio.
C
The last stage of a product life cycle is a. growth. b. maturity. c. decline. d. introduction.
C
The primary source of financing for most small business startups is a. institutional loans. b. angel investors. c. personal savings. d. stock offering.
C
The value of a depreciable asset a. is constant over time. b. increases with each use of the asset. c. decreases over time. d. increases over time
C
Which of these basic firm characteristics significantly affect how a business is financed? a. the firm's past performance b. the size of the competitors c. the nature of its assets d. the preferences of the bankers with respect equity desire
C
_____ are the starting point for all behavior. a. Perceptions b. Motivations c. Needs d. Evaluations
C
_____ equals current assets divided by current liabilities. a. Liquidity b. Cash flow c. Current ratio d. Return on assets
C
A _____ relationship is an association between a business and a customer that relates to a purchase or a business deal. a. transitional b. customer service c. customer management d. transactional
D
A collection of information about a customer including demographic data, attitudes, preferences, and other behavioral characteristics, as defined by CRM goals, is called a a. customer description. b. target market. c. target audience. d. customer database.
D
A firm using a _____ pricing strategy prices products or services lower than a normal, long-range market price in order to gain more rapid market acceptance or to increase existing market share. a. skimming b. variable c. flexible d. penetration
D
A legal term that identifies a firm's exclusive right to use a brand is called a a. warranty. b. brand name. c. brand mark. d. trademark.
D
A(n) _____ is a financial acquisition involving a very high level of debt financing, where the future cash flows of the target company are expected to be sufficient to meet debt repayments. a. opportunity cost of funds b. bust-up LBO c. initial public offering d. leveraged buyout
D
All of the following are basic types of sales transactions when an entrepreneur is harvesting an investment EXCEPT: a. strategic acquisition. b. financial acquisition. c. employee acquisition. d. environmental acquisition.
D
All of the following are factors that drive profits EXCEPT: a. amount of sales. b. operating expenses. c. taxes. d. product design.
D
All of the following are intermediaries EXCEPT: a. merchant middlemen. b. agents. c. brokers. d. common carriers.
D
All of the following are legislation related to credit management EXCEPT the: a. Fair Credit Billing Act. b. Equal Credit Opportunity Act. c. Fair Debt Collection Practices Act. d. Sherman Antitrust Act.
D
All of the following are major kinds of consumer credit EXCEPT: a. open charge accounts. b. installment accounts. c. revolving charge accounts. d. savings accounts.
D
Business brokers do all of the following EXCEPT: a. assist in buying and selling of a business. b. find possible buyers. c. help facilitate negotiations. d. decide whether to accept or deny offers.
D
Check My Work In a transfer of ownership there must be a trade-off among all of the following important goals EXCEPT: a. cash for the selling family members. b. continued financing for the company's future growth. c. the younger generation to maintain control of the firm. d. continued control over parts of the firm.
D
Common credit card types include all of the following EXCEPT: a. bank cards. b. financial institution cards. c. retailer cards. d. installment cards.
D
Harvesting encompasses all of the following EXCEPT: a. creating future options. b. capturing value. c. reducing risk. d. expanding.
D
Operating expenses consist of all of the following EXCEPT: a. marketing and selling expenses. b. general and administrative expenses. c. depreciation. d. cost per number of item sold.
D
The amount of the business owner's initial investment, owner's later investment in the business, and retained earnings comprise a. debt capital. b. accrued expenses. c. owner's long-term debt. d. owner's equity capital.
D
The last stage of the new product development process is a. idea accumulation. b. development of the physical product. c. business analysis. d. product testing.
D
The purpose of pro forma financial statements is to answer all of these questions EXCEPT: a. How profitable can you expect the firm to be, given the projected sales levels and the expected sales-expense relationships? b. How much and what type of financing (debt or equity) will be needed to finance a firm's assets? c. Will the firm have adequate cash flows? If so, how will they be used? If not, where will the additional cash come from? d. What are the firm's core competencies in the marketplace compared to the competitors?
D
The three stages of the competitive advantage life cycle are a. introduction, growth, and decline. b. introduction, deploy, and decline. c. develop, deploy, and maturity. d. develop, deploy, and decline.
D
Two important building blocks to developing a CRM program are a. outstanding transactional relationships and a relevant, working database. b. a database and knowledge of consumer behavior. c. a database and stockholders. d. outstanding transactional relationships and knowledge of consumer behavior.
D
____ are generally used to finance equipment with a useful life corresponding to the loan's term. a. Chattel mortgages b. Line of credit c. Estate mortgages d. Term loans
D
____ is the process of raising very small investments from a large number of investors online. a. Basis point b. Loan covenants c. Factoring d. Crowdfunding
D
_____ is measured by dividing current assets by current liabilities. a. Total debt ratio b. Line of credit c. Total equity to liability d. Current ratio
D
A strategy of ___________ involves bypassing retailers and going to the customer directly through online operations.
Disintermediation
E-commerce
Electronic commerce, or the buying and selling of products or services over the Internet.
e-commerce
Electronic commerce, or the buying and selling of products or services over the Internet.
General-purpose equipment permits cost reduction in industries in which the technology is fully established and in which a capacity is assured by high sales volume. a. True b. False
False
In industries in which the technology is fully established and a capacity operation is assured by high sales volume, retail store equipment can reduce costs. a. True b. False
False
zoning ordinances
Local laws regulating land use.
Special-purpose equipment
Machines designed to serve specialized functions in the production process.
special-purpose equipment
Machines designed to serve specialized functions in the production process.
General-purpose equipment
Machines that serve many functions in the production process.
general-purpose equipment
Machines that serve many functions in the production process.
According to the Business Tax Index report, which state in 2012 had the most favorable tax systems? a. South Dakota b. Florida c. Illinois d. Maryland
South Dakota
_________ equipment has a limited use and is only justified at high volumes of output.
Special Purpose
disintermediation
The bypassing of a middleman by a producer or wholesaler in order to sell its product or service directly to the final consumer.
brick-and-mortar facility
The traditional physical facility from which businesses have historically operated.
auction sites
Web-based businesses offering participants the ability to list products for consumer bidding.
An enduring opinion that is based on knowledge, feeling, and behavioral tendency is called a(n) _____. a. attitude b. perception c. need d. motivation
a
Tangible assets serve as great collateral when a business is requesting a bank loan. a. True b. False
a
Challenges in designing the physical facilities for a new business include finding all of the following EXCEPT: a. a space that is extravagant. b. a space that is too small. c. a space that is too large. d. a space that is practical.
a space that is extravagant
____ equipment requires a minimal investment and is easily adapted to varied types of operations. a. General-purpose b. Retail store c. Special-purpose d. Leasing
a. General-purpose
________ equipment requires a minimal investment and is easily adapted to varied types of operations.
a. General-purpose
Which of these is a key challenge of running a home-based business?
a. Professional image
Which of these is a key challenge of running a home-based business? a. Professional image b. Loss of tax advantage c. Warehousing limitation d. Shipping difficulties
a. Professional image
Interestingly, many zoning laws, dating as far back as the 1930s, have never been updated.
a. True
One of the benefits of e-commerce is that it allows small businesses to compete on a more level playing field with large businesses.
a. True
One of the considerations in selecting a location for a business is the availability of resources.
a. True
nterestingly, many zoning laws, dating as far back as the 1930s, have never been updated.
a. True
With _____ pricing, the total cost (cost of goods sold plus operating expenses) over a previous period is divided by the quantity sold in that period to arrive at an average cost, which is then used to set the current price. a. average b. variable c. skimming d. price-lining
a. average
Which of these is a key challenge of running a home-based business? a. professional image b. loss of tax advantage c. warehousing limitation d. shipping difficulties
a. professional image
A facility that rents space specifically to new businesses or to people wishing to start a business is called a: a. Startup generator. b. Business incubator. c. Launch pad. d. Slingshot.
b. Business incubator.
The _____ approach recognizes that with every interaction, customers learn something about a business that will either strengthen or weaken their satisfaction and desire to return. a. CRM b. CEM c. perception d. segmentation
b. CEM
A business incubator produces ideas for new ventures.
b. False
In industries in which the technology is fully established and a capacity operation is assured by high sales volume, retail store equipment can reduce costs.
b. False
____ is the extent to which a good or service is perceived by its customer to meet his or her needs or wants and is measured by a customer's willingness to pay for it. a. Price b. Value c. Cost d. Credit
b. Value
A site such as e-Bay, that allows participants to list products for sale through bidding by potential buyers, is called a(n) a. bidding site. b. auction site. c. buying site. d. shopping site.
b. auction site.
A site such as e-Bay, that allows participants to list products for sale through bidding by potential buyers, is called a(n)-- a. bidding site. b. auction site. c. buying site. d. shopping site.
b. auction site.
Which of the following key factors in determining a good business location includes decisions about weather conditions, competition, legal requirements, and tax structure? a. personal preference b. environmental conditions c. population sparseness d. customer accessibility
b. environmental conditions
Protecting a neighborhood's residential quality is the primary purpose of _____ laws. a. local b. zoning c. home-based d. homeowners association
b. zoning
Protecting a neighborhood's residential quality is the primary purpose of ________ laws.
b. zoning
A down payment of _____ percent is usually required for equipment purchases on an installment basis through an equipment loan. a. 90 b. 50 c. 25 d. 10
c
Private placement stock is usually sold to all of the following EXCEPT: a. employees. b. owner's acquaintances. c. the public. d. suppliers.
c
The return on owner's equity can be calculated as net profits divided by _____. a. financial leverage b. profit margins c. total owners' equity d. total asset turnover
c
_____ are the shares that represent investor ownership in a firm. a. Owner's equity b. Retained earning c. Common stock d. Total assets
c
All of the following are e-commerce business models EXCEPT: a. B2B. b. B2C. c. B2A. d. Auction site.
c. B2A.
Which of the following is NOT an advantage of opening a home-based business? a. It is often quicker and cheaper to get up and running. b. You will save time and money on daily commutes. c. Customers feel more comfortable in your home. d. You will be your own boss.
c. Customers feel more comfortable in your home.
According to the Business Tax Index report, which state in 2017 had the most favorable tax systems? a. Maryland b. Florida c. Nevada d. Illinois
c. Nevada
All of the following are key factors in determining a good business location EXCEPT:
c. Population sparseness.
Which of the following statements best describes the proper way to purchase equipment and furnishings for a new business? a. Spend only what you absolutely have to even if the furnishings look ratty and unkempt. Customers won't mind. b. Always get the most expensive. Nothing turns customers away like knowing the computers were bought used. c. Save money when possible, but make sure the company looks stable and professional. d. Always rent equipment. Renting is always cheaper.
c. Save money when possible, but make sure the company looks stable and professional.
Which of the following is a business model that provides a mechanism for buying or selling products or services and is considered the center of the e-commerce universe?
c. Transaction-based
Challenges in designing the physical facilities for a new business include finding all of the following EXCEPT: a. a space that is too small. b. a space that is too large. c. a space that is extravagant. d. a space that is practical.
c. a space that is extravagant.
A _____ is a facility that rents shared space, services and management assistance to new businesses or to people wishing to start businesses. a. zoning ordinances b. brick-and-mortar facility c. business incubator d. transaction-based model
c. business incubator
A ______ is a facility that rents space to new businesses or to people wishing to start businesses.
c. business incubator
The type of equipment that reduces cost in industries in which the technology is fully established and in which a capacity operation is assured by high sales volume is called _____ purpose equipment. a. general b. retail c. special d. total
c. special
Which of the following is a business model that provides a mechanism for buying or selling products or services and is considered the center of the e-commerce universe? a. content-based b. information-based c. transaction-based d. cyber-based
c. transaction-based
Key factors in determining a good business location include all of these EXCEPT: a. Community approval. b. Customer accessibility. c. Resource availability. d. Site availability and costs
community approval
All of the following are channels of distribution EXCEPT: a. direct. b. indirect. c. dual. d. common.
d
To make an informed decision, a small business owner needs to recognize and understand trade-offs between debt and equity with regards to all of the following EXCEPT: a. financial risk. b. voting control. c. potential profitability. d. intangible assets.
d
Key factors in determining a good business location include all of these EXCEPT: a. customer accessibility. b. resource availability. c. site availability and costs. d. community approval
d. community approval
A process wherein a wholesaler decides to bypass middlemen and sell direct to end users is called_____________. a. predatory pricing b. price lining c. W2C d. disintermediation
d. disintermediation
A process wherein a wholesaler decides to bypass middlemen and sell directly to end users is called _____. a. predatory pricing b. price lining c. W2C d. disintermediation
d. disintermediation
According to government surveys, business owners choose to run their businesses out of their homes for all of the following reasons EXCEPT: a. quick and cheap to get up and running. b. save time and money on daily commuting. c. spend more time with family and friends. d. they do not have to maintain a professional office area.
d. they do not have to maintain a professional office area.
A process wherein a wholesaler decides to bypass middlemen and sell direct to end users is called ________ . a. W2C b. price lining c. disintermediation d. predatory pricing
disintermediation
General-purpose equipment permits cost reduction in industries in which the technology is fully established and in which a capacity is assured by high sales volume. a. True b. False
false
The type of equipment that reduces cost in industries in which the technology is fully established and in which a capacity operation is assured by high sales volume is called ________ purpose equipment. a. total b. retail c. general d. special
special
According to government surveys business owners chose to run their businesses out of their homes for all of the following reasons EXCEPT: a. they do not have to maintain a professional office area. b. spend more time with family and friends. c. save time and money on daily commuting. d. quick and cheap to get up and running.
they do not have to maintain a professional office area
One of the benefits of e-commerce is that it allows small businesses to compete on a more level playing field with large businesses. a. True b. False
true
One of the considerations in selecting a location for a business is proximity to the business owner's home? a. True b. False
true