Entrepreneurship Final possibly

65. One suggestion for helping to recall key examples, visual aids, and other details when presenting the business plan is to utilize keywords in the outline. Select one: True False

True

68. Frugality is deemed a bootstrapping technique. True False

True

82. A solid process lays the foundation for a healthy culture, one where ideas are evaluated by merit and not by job title. True False

True

83. Startups are too unpredictable for forecasts and milestones to be accurate. True False

True

A SWOT analysis refers to analyzing strengths, weaknesses, opportunities, and threats. True False

True

Adjusted tangible book value is a popular method of valuation. True False

True

Many research studies suggest that strategic planning influences a venture's survival. True False

True

Misunderstanding industry attractiveness can be a fatal flaw in strategic planning. True False

True

Most entrepreneurs are unfamiliar with planning information sources. True False

True

One of the most common reasons for acquiring a business is developing more growth-phase products. True False

True

Replacement value of a business is based upon the value of each asset if it had to be replaced at current cost. True False

True

Research has shown a distinct lack of planning on the part of new ventures. True Fasle

True

Research indicates that strategic planning enhances a firm's performance. True False

True

Tangible assets as well as intangible assets of a business need to be assessed for proper venture evaluation. True False

True

The "best" strategic plan will be influenced by the abilities of the entrepreneur, the complexity of the venture, and the nature of the industry. True False

True

The actual need for systematic planning will vary with the nature, size, and structure of the business. True False

True

The real value of any venture is its potential earning power. True False

True

Wealth creation occurs at the intersection of entrepreneurial and strategic actions. True False

True

9. Which of the following is not a method of collecting primary data? a. telephone b. review of government publications c. mail survey d. observation

b. review of government publications

9. Which of the following is not used in balance sheet ratios? a. current liabilities b. sales c. current assets d. cash

b. sales

How much revenue did Facebook raise with its initial public offering (IPO) in 2012? a. $50 billion b. $16 billion c. $10 billion d. $150 billion

a. $50 billion

26. Design patent protection lasts for __________ years. a. 15 b. 20 c. 12 d. 10

a. 15

74. According to Forbes, the net worth of the richest ___________ Americans was 2.29 trillion (5.73 billion per person). a. 400 b. 100 c. 5,000 d. 1,000

a. 400

9. How many steps are in the Business Development Program? a. 7 b. 4 c. 9 d. 15

a. 7

34. The _____________ on the Call To Actions are critical for the success of any website and should be monitored very closely. Select one: a. Click Through Rate b. Number of Visitors c. Bounce d. Conversion Rate

a. Click Through Rate

10. What question do you ask to discover Your primary Aim? a. How would you like your story to go? b. How long have you wanted to open a business? c. What kind of shoes do your wear? d. Where do you live?

a. How would you like your story to go?

48. "__________ is the signature of a bold, imaginative hand"? Select one: a. Innovation Correct b. Discipline c. Hard Work d. Magic

a. Innovation

68. An S corporation takes its name from a. Subchapter S b. state law c. Uniform Commercial Code d. S Lab

a. Subchapter S

40. The two parts to a patent application are claims and a. specification b. percentage c. integration d. value

a. specification

4. Innovation is a __________. a. unpredictable thing b. All of these are included in innovation c. decentralized d. bottoms-up

b. all of these are included in innovation

The Lean StartUp Quiz 1. Planning and forecasting are only accurate when based on a long, stable operating history and a relatively static environment. This is why they work so well for start-up companies. True False

False

The price/earnings ratio is determined by dividing the market price of common stock by retained earnings. True False

False

"Why is the business being sold?" is not an important question to ask when analyzing the viability of buying a business. True False

False

10. Contribution margin is the difference between the selling price and the fixed cost per unit. True False

False

10. Once an entrepreneur decides to "harvest" the business, their challenges and responsibilities are over. True False

False

11. A business plan must illustrate the current status of the venture, not the projected results. True False

False

11. Entrepreneurs should not be concerned with establishing a clear fee structure with an attorney before any legal matters are handled True False

False

14. A managerial successor provides the critical ideas for new-product development and future ventures. True False

False

14. The freemium model requires new and exciting content each month to build a long-term relationship with fee-paying customers. True False

False

16. Harvest strategies rarely involve the complete sale of a business. True False

False

16. It is usually more expensive to gather secondary data than primary data. True False

False

17. Sales-to-assets measures the efficiency of total assets in generating net profit: the number of dollars in net profit produced for every $1 invested in net assets. True False

False

17. The extent of overlap between the family and business systems does not vary from family business to family business. True False

False

18. External environmental factors do not have any effect on the succession issue. True False

False

22. Trademark registration and search is not costly. True False

False

3. Only major strategic decisions need to be supported through marketing research. True False

False

46. Only 10 percent of all privately held enterprises make it to a third generation. True False

False

47. The entrepreneur's professionalism and how well he or she handles the venture capitalist is far more important than being well organized and prepared. True False

False

47. The set of assumptions on which financial projections are based have little meaning. True False

False

50. Chapter 7, Chapter 9, and Chapter 11 are the most common forms of bankruptcy. True False

False

50. There is a way to remove the human element - vision, intuition, judjment - from the practice of entrepreneurship. True False

False

51. The registration of a trademark lasts for 40 years, with continuous renewal every 10 years. True False

False

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

False

52. A consumer-driven marketing philosophy often relies on direct selling. True False

False

54. A business plan should be no more 150 pages. True False

False

54. Copyrights have to be registered with the Copyright Office. True False

False

55. The first step in marketing research is to gather primary data. True False

False

56. Effective marketing is based on three key elements: marketing philosophy, market segmentation, and consumer philosophy True False

False

57. A firm's pricing structure dictates almost no knowledge to customers. True False

False

57. Pro forma statements show the firm's present financial position. True False

False

Chapter 13 Quiz Many new ventures find strategic planning difficult because entrepreneurs are typically specialists. True False

False

Emotional bias is not an underlying issue in valuing a business. True False

False

Formal planning can be divided into strategic and nonstrategic. True False

False

Four specific managerial actions are necessary during the growth stage: control, responsibility, intolerance of failure, and change. True False

False

In principle, incumbents and entrepreneurs face the same challenges in finding new strategic positions, whereas in practice, incumbents often have an edge. True False

False

Insufficient controls are a strength for a small business and should be considered when the business is being valued. True False

False

Knowing a venture's pre-money valuation is not possible. True False

False

Lack of expertise has never been considered a reason for the lack of strategic planning in new ventures. True False

False

Participation by subordinates in a strategic plan is never appropriate. True False

False

Small firm owners/managers are usually very open and trusting about their businesses and the decisions that affect them. True False

False

The "timing" of projected income or cash flows is not a critical factor in establishing the value of a firm. True False

False

Vesting on founders' stock refers to holders of preferred stock having the right to purchase additional shares when issued by the company. True False

False

Weaknesses in small, closely held businesses do not call for careful analysis of the business being valued. True False

False

When a company is liquidated, preferred stockholders receive a certain fixed amount after assets are distributed to common stockholders. True False

False

10. Marketing information that has already been compiled is known as secondary data. True False

True

12. A business plan is the written document that details the proposed venture. True False

True

12. Babies and career are indicative of the priorities that shape the buying decisions of persons in the nest-building stage of the family life cycle. True False

True

40. While many companies set goals like "increase brand awareness," this kind of objective leaves a lot up to interpretation. Select one: True False

True

41. An entrepreneur is much better off preparing his or her own business plan rather than hiring someone else, even if more experienced, to prepare it. True False

True

42. Startups need to conduct experiments that help determine what techniques will work in their unique circumstances. True False

True

45. Early adopters use their imagination to fill in what a product is missing. True False

True

46. A market niche is a homogeneous group with common characteristics (i.e., all the people who have a need for a newly proposed product or service). True False

True

47. A patent is an intellectual property right. True False

True

63. In bankruptcy terms, Chapter 7 is often called liquidation. True False

True

The second stage of venture development is a. realize cost savings, accurate forecasting, and increased sales b. start-up activities c. growth d. stabilization

b. start-up activities

38. Which of the following is not one of the three types of systems? a. soft system b. starter system c. hard system d. information system

b. starter system

14.What is the second standard of a Strategic Objective? a. Cut Cost b. Maximize Revenue c. Proper Inventories d. An Opportunity Worth Pursuing

d. An Opportunity Worth Pursuing

49. Building the Prototype of your business is what kind of process? Select one: a. One day b. Single Step c. Impossible d. Continuous

d. Continuous

53. Once you were stricken with an ___________ Seizure there was no relief? Select one: a. Brain b. Muscle c. Business d. Entrepreneurial

d. Entrepreneurial

26. A _________ business knows how it got to be where it is, and what it must do to get where it wants to go? a. teenage b. starter c. infant d. mature

d. mature

58. Accounts receivable turnover measures the rate at which accounts receivable are being collect on a monthly basis. True False

False

6. Vertical analysis is the application of ratio analysis to the many sets of financial statements. True False

False

60. Business owners normally prefer Chapter 7 bankruptcy over any other form of bankruptcy. True False

False

62. Skimming is setting prices at such a low level that products are sold at a loss. Select one: True False

False

63. Copying the latest social media craze is an indication of not having realistic goals. Select one: True False

False

7. In preparing a business plan for oral presentation, the entrepreneur should scan the outline once or twice. True False

False

71. Pivots are a permanent fact of life for any growing business. Unless they achieve initial success. True False

False

8. It is typical for a firm to prepare an operating budget but not a cash-flow budget. True False

False

91. The stories in the magazines are true: hard work and perseverance does lead to success. True False

False

An entrepreneur does not need to know how to calculate the value of a competitor's operation. True False

False

30. If a trademark has not been used for 2 consecutive years, it could be invalidated under a. cancellation proceedings b. abandonment c. a cleaning-out procedure d. generic meaning

b. abandonment

27. The executive summary gives a brief overview of what is to follow, helps put all of the information into perspective, and should be no longer than three pages. True False

True

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

True

28. Sophisticated investors are wealthy individuals who invest more or less regularly in new or early- and late-stage ventures. True False

True

28. The typical business will have cash inflows from three sources: cash sales, cash payments received on account, and loan proceeds. True False

True

29. Startup success can be engineered by following the right process, which means it can be learned, which means it can be taught. True False

True

30. Geographic flexibility is greater for telephone interviews than for in-person interviews. True False

True

30. Lack of any time frame to accomplish things is an indicator of the pitfall known as no realistic goals. True False

True

31. Ries believes that entrepreneurship requires a managerial discipline to harness the entrepreneurial opportunity we have been given. True False

True

32. A startup is a human institution designed to create a new product or service under conditions of extreme uncertainty. True False

True

33. Loss of ownership control is often attributable to one of the "Four Ds": disability, death, dissolution, and debtorship. True False

True

33. Once issued, the trademark is registered with the Patent and Trademark Office. True False

True

33. The first step in creating an operating budget is to prepare the sales forecast. True False

True

34. An investment prospectus is the same as a business plan. True False

True

34. Horizontal analysis looks at financial statements and ratios over time. True False

True

34. The liquidity event can be achieved through an initial public offering (IPO) or complete sale of the venture. True False

True

34. The prevailing management paradigm is inadequate to handle the problems of continuous innovation in the modern economy. True False

True

36. An exit strategy is defined as that component of the business plan where an entrepreneur describes a method by which investors can realize a tangible return on their investment. True false

True

37. One of the first steps for any website is getting views so a very important metric to keep your eye on is the number of visitors your website is getting every month. Select one: True False

True

39. Marketing research involves the gathering of information about a particular market, followed by analysis of the information. True False

True

39. The basic rule for privately held businesses is this: The owner should develop a succession plan. True False

True

4. The liquidity event stands for positioning the venture for the realization of a cash return for the owners and investors True False

True

40. Mobile social media applications can be differentiated based on location-sensitivity as well as on time-sensitivity. True False

True

42. The principal objective of capital budgeting is to maximize the value of the firm. True False

True

43. A good idea is important, but a good management team is even more important. True False

True

43. At present, the courts have held that the unauthorized use of another's mark in a domain name may constitute trademark infringement. True False

True

44. Any legal proceeding can cost an entrepreneur a lot of money in legal fees. True False

True

44. Entrepreneurs possess a unique combination of perseverance and flexibility. True False

True

45. After the operating budget has been prepared, an entrepreneur can proceed to the next phase of the budget process, which is the cash-flow budget. True False

True

47. Once IMVU's effects were aligned with what customers really wanted, their experiments were much more likely to change their behavior for the better. True False

True

48. Marketing planning is the process of determining a clear, comprehensive approach to the creation of customers. True False

True

49. The business plan is a critical element in a new-venture proposal. True False

True

50. The cash-flow budget provides an overview of cash inflows and outflows for the budget period. True False

True

51. Shopping goods are products that consumers take time to examine carefully and compare for quality and price. True False

True

51. The handling questionable costs approach of break-even analysis was specifically designed for firms that have expenses that are difficult to assign. True False

True

52. Capital investments or capital expenditures are expected to last beyond one year. True False

True

52. Sources of debt financing include trade credit, accounts receivable financing, factoring, and finance companies. True False

True

52. The decision to pivot requires a clear-eyed and objective mind-set. True False

True

52. When looking ahead in choosing a successor from inside the organization, the founder often trains a team of executive managers consisting both family and nonfamily members. True False

True

53. Companies are able to design, develop, and ship out new features one at a time, taking advantage of the power of small batches. True False

True

53. Financial information pulls together all the information presented in the other segments of the business. True False

True

53. One of the principal advantages of a corporation is that the stockholder's liability (the most money a person can lose) is limited to an individual's investment. True False

True

55. A copyright provides exclusive rights to creative individuals for the protection of their artistic productions. True False

True

55. Because of the competition for funding, an entrepreneur's business plan needs to capture the reader's interest right away by stating the uniqueness of the venture. True False

True

57. A harvest plan defined how and when owners and investors will realize an actual cash return on their investment. True False

True

58. Anyone who violates an author's exclusive rights under a copyright is liable for infringement. True False

True

58. The harvest decision may come when the venture has grown to a stage where an initial public offering (IPO) is a possibility. True False

True

59. Because of the fair use doctrine, it is sometimes difficult to establish infringement. True False

True

6. Customers reveal the truth in what they want by their action or inaction to your products or services. True False

True

60. Break-even analysis is used to tell how many units must be sold in order to break even at a particular selling price. True False

True

60. Nepotism policies are lawful unless they have an "adverse impact" on women or minority groups (as in the Oakland Scavenger Company case). True False

True

62. A trademark is a distinctive name, mark, or symbol that is identified with a company's product. True False

True

63. A budget is one of the most powerful tools that an entrepreneur can use in planning business operations. Select one: True False

True

63. Pricing for the product life cycle correlates with customer demand and sales volume. Select one: True False

True

64. Even after marketing research is done, many entrepreneurs are unsure of how to price their products or services. Select one: True False

True

64. Patents eventually expire True False

True

66. A common mistake in business planning is using acronyms and technical jargon without clearly explaining them early in the business plan. Select one: True False

True

66. We must be willing to set aside our traditional professional standards to start the process of validated learning as soon as possible. True False

True

68. The Oakland Scavenger Company case may have a major effect on the management succession plans of family business. Select one: True False

True

69. Family members who do not play an active role in the business may still want to inherit part of the business. Select one: True False

True

7. Everything a startup does is understood to be an experiment designed to achieve validated learning. True False

True

7. The prospectus for an initial public offering (IPO) must disclose fully all pertinent information about a company and must present a fair representation of the firm's true prospects. True False

True

71. Because corporate law makes it difficult for businesses to consider employee, community, and environmental interests in their decision making, the B corporation has been introduced. True False

True

75. Startups exist not just to make stuff, make money, or even serve customers. They exist to learn how to build a sustainable business. True False

True

78. We must learn what customers really want, not what they say they want or what we think they should want. True False

True

8. For most businesses, especially the larger ones, marketing is a fluid and constantly changing process that never stops. True False

True

81. If we do not know who the customer is, we do not know what quality is. True False

True

84. The challenge of entrepreneurs is to find ways to achieve the same amount of validated learning at lower cost or in a shorter time. True False

True

85. Companies that cannot bring themselves to pivot to a new direction on the basis of feedback from the marketplace can get stuck in the land of the living dead, neither growing enough nor dying, consuming resources and commitment from employees and other stakeholders but not moving ahead. True False

True

86. Small batches normally allow new versions of products to be released to customers on a monthly, quarterly, or yearly cycle. True False

True

The entrepreneurial strategy matrix measures risk and innovation. True False

True

33. A ____________, can be defined as a measurement that is in place to measure the performance of any business activity. Select one: a. Key Performance Indicator b. bounce rate c. click through rate d. . ratio analysis

a. Key Performance Indicator

61. Inhibitors to marketing research include all of the following except Select one: a. distribution. b. cost. c. irrelevancy. d. complexity.

a. distribution.

The price/earnings ratio is determined by a. dividing market price of common stock by earnings per share b. dividing the average product price by overall earnings c. dividing market price of bonds by earnings per share d. multiplying market price of common stock by earnings per share

a. dividing market price of common stock by earnings per share

52. The most common viewpoint in business plans is the viewpoint of the a. entrepreneur b. competitor c. marketplace d. financial source

a. entrepreneur

5. Break-even analysis is used to assess a. expected product profitability b. future sales c. expected capital expenditures d. revenue

a. expected product profitability

64. One of most important lessons of the scientific method: if you cannot __________, you cannot learn. a. fail b. reach your customers c. develop a strategic plan d. produce innovative products

a. fail

8. What is the secret behind the success of the Business Format Franchise? a. Franchise Prototype b. Low Cost c. Sales Revenue d. Good name

a. franchise prototype

17. Most companies organize around personalities rather than around __________? a. functions b. goals c. needs d. strategies

a. functions

The reason many small business managers lack expertise is that they are a. generalists b. optimists c. subordinates d. specialists

a. generalists

16. The cash flow does not come from a. goods purchased on account b. loan proceeds c. cash payments received on account d. cash sales

a. goods purchased on account

Chapter 10 1. All of the following factors affect pricing strategies except a. government mandates b. changes in demand c. distribution costs d. degree of competitive pressure

a. government mandates

63. The _________ hypothesis tests how new customers will discover a product or service. a. growth b. value

a. growth

Which of the following stages of venture development requires major changes in entrepreneurial strategy? a. growth b. start-up activities c. business stabilization d. new-venture development

a. growth

41. Why did Sarah start selling pies? a. her best friend said she should because she was so good at making pies b. someone gave her a free building c. her husband offered to finance her company d. she was fired from her old job

a. her best friend said she should because she was so good at making pies

All of the following are characteristics of entrepreneurial cultures except a. hierarchy b. many stages c. episodic use of required resources d. flat

a. hierarchy

Sales and earnings of a venture are projected from a. historical financials b. historical projections c. property values d. data on start-ups

a. historical financials

24. Items that can qualify for patent protection include all of the following except a. ideas b. processes c. machines d. products

a. ideas

24. The purpose of marketing research is to a. identify customers b. gain customers c. fulfill customer needs d. develop new products

a. identify customers

56. Succession pressure inside the firm exists a. if family member want to keep and manage the business themselves b. if competition is hurting the business c. if nonfamily employees don't want the business d. when the founder wants to give up authority

a. if family member want to keep and manage the business themselves

19. For a manufacturing firm, the production budget represents the number of units that must be produced a. in order to meet the sales forecast b. to cover R&D costs c. achieve the desired profit level d. to break even

a. in order to meet the sales forecast

27. Which of the following is not associated with entrepreneurial tactics in market research? a. in-person interviews b. lead user research c. blog monitoring d. guerrilla marketing

a. in-person interviews

51. With all pivots, we have to get back to the basics and start the _________ over. a. innovation accounting cycle b. market study c. strategic analysis d. planning

a. innovation accounting cycle

70. A method that discounts future cash flows at a rate that makes the net present value of the project equal to zero is known as the Select one: a. internal rate of return. b. break-even point. c. net present value. d. payback method.

a. internal rate of return.

4. In some professional areas, the business plan is referred to as a(n) a. investment prospectus b. proposal for economic development c. proposal for organizational growth d. strategic development project

a. investment prospectus

Return on investment a. is net profit divided by investment b. provides a replacement value c. establishes a value for the business d. is equal to the current prime rate

a. is net profit divided by investment

70. The goal of creating learning milestones is ____________; to make sure that there is relevant data in the room when it comes time to decide. a. is not to make the decision easy b. assist in making the decisions easy c. make decision easy to make d. none of these are correct.

a. is not to make the decision easy

The primary advantage of the price/earnings approach to valuation is that it a. is simple to use b. pays off assets and sells liabilities c. assumes business begins operations d. reflects "top value" of the firm

a. is simple to use

72. Most privately held firms Select one: a. lack a succession plan. b. leave the succession decision to the executor of the owner's will. c. pass the firm to a child. d. don't view succession as a major issue.

a. lack a succession plan.

In many new small ventures, planning is often a. lacking b. overused c. overdone d. well accomplished

a. lacking

11. The ____________ about how to build a sustainable business is the outcome of experiments. a. learning b. strategy c. All of these are correct d. vision

a. learning

44. Which of the following survey methods has the lowest response rate? a. mail surveys b. internet surveys c. phone interviews d. personal interviews, door to door

a. mail surveys

40. What do you need instead of highly sophisticated workers? a. management system b. good location c. good products d. technology

a. management system

48. Which of the following would be appropriate to include in an appendix to a business plan? a. management team vitae b. capital funding requirements c. niche market analysis d. projected first-year sales

a. management team vitae

8. A type of successor who is interested in efficiency, internal control, and effective use of resources would be considered a(n) __________ successor. a. managerial b. entrepreneurial c. opportunistic d. family

a. managerial

28. The business plan provides the details of the _________ potential of a business. a. market b. financial growth c. entrepreneurial d. product growth

a. market

20. Which of the following does the textbook identify as critical to the marketing planning process? a. marketing information systems b. marketing niche c. marketing segmentation d. marketing forecasting

a. marketing information systems

14. A ____________ helps entrepreneurs start the process of learning as quickly as possible. a. minimum viable product b. sound business plan c. strategic plan d. All of these are correct

a. minimum viable product

26. Over the past couple of years, however, __________ have become the primary driver of search traffic. a. mobile devices b. all of these are correct c. big stores d. small mom and pop stores

a. mobile devices

9. By design, a truly ___________ relies almost solely on mobile apps and marketing campaigns. a. mobile-first brand b. all of these are correct c. strategic, long-term plan d. closely monitored social media plan

a. mobile-first brand

14. An abundance of _________ can lead to annoying and distracting visitors. a. moving objects b. content c. pictures d. key words

a. moving objects

21. Informal investors find projects to invest in through a. networks of friends b. university think tanks c. business classifieds d. Forbes

a. networks of friends

20. An indicator of the planning pitfall of "no commitment or dedication" is a. no interest in researching the idea b. not understanding the industry c. no experience in the business d. no recognition of future problems

a. no interest in researching the idea

Which of the following would be considered a fatal mistake in strategic planning, according to researcher Micheal E. Porter? a. no real competitive advantage b. no real innovation c. no real financial forecasts for busienss d. no real objectives

a. no real competitive advantage

20. Which of the following is an event that would require an entrepreneur to step aside and let someone else direct the operation? a. nonterminal physical incapacitation b. disagreements with children or business partners c. divorce d. age

a. nonterminal physical incapacitation

88. Successful startups usually focus on __________ engine(s) of growth, specializing in everything that is required to make it work. a. one b. four c. three d. two

a. one

41. Research on family firms demonstrates which of the following facts? a. only 16 percent make it to a third generation b. many family firms cease to exist after one month c. only 3 percent make it to the next generation d. only 9 out of 10 make it to the second generation

a. only 16 percent make it to a third generation

Measuring Success 1. Knowing what __________ receive the most traffic is hugely important because it gives you real-world data showing what you audience responds to. a. pages b. all of these are correct c. ads

a. pages

48. When a company _________, it starts the process all over again, reestablishing a new baseline and then tuning the engine from there. a. pivot b. both of these are correct c. persevere

a. pivot

27. Under U.S. law, which of the following is the first step in the initial public offering (IPO) process? a. present the proposal to the board b. perform a road show c. draft a prospectus d. select a financial printer

a. present the proposal to the board

33. According to the textbook author, a pitfall to avoid in planning is lack of a. priorities b. illustrations c. profit orientation d. future vision

a. priorities

71. The financial segment includes the Select one: a. pro forma balance sheet. b. profit statement. c. R&D statement. d. cost statement.

a. pro forma balance sheet.

54. The biggest advantage of working in small batches is that _____________. a. quality problems can be identified much sooner b. the money required is not so great c. you can take advantage of economies of scale d. it has lower human resource requirements

a. quality problems can be identified much sooner

2. All innovations need to be _________? a. quantifiable b. outsourced c. edible d. invisible

a. quantifiable

8. Zappos' initial experiment provided a clear, _________. a. quantifiable outcome b. direction by management c. All of these are correct d. management strategy

a. quantifiable outcome

4. Which of the following is not a key factor affecting a marketing information system? a. size of the system b. data relevancy c. usefulness or understandability of data d. system cost

a. size of the system

31. Products or services that consumers make a special effort to find and purchase are ___________ goods. a. specialty b. convenience c. generic d. shopping

a. specialty

15. Which of the following is not a pitfall that should be addressed in planning a venture? a. specific profit goals b. flexibility c. milestones d. realistic goals

a. specific profit goals

44. It is recommended that the final copy of the business plan be a. spiral bound b. stapled c. professionally typeset and bound d. paper clipped

a. spiral bound

Formation of long-range plans for effective management in light of a venture's strengths and weaknesses is referred to as ________ planning. a. strategic b. operational c. dimensional d. tactical

a. strategic

18. Your __________ is a very clear statement of what your business has to ultimately do for you to achieve your Primary Aim? a. strategic objective b. health c. education d. family

a. strategic objective

65. "Harvest" does not mean that Select one: a. the challenges and responsibilities of the entrepreneur are over. b. the firm continues to exist. c. all the profits have been reaped. d. family members agree about the business.

a. the challenges and responsibilities of the entrepreneur are over.

32. Outside help in succession planning should be considered when a. the entrepreneur's ego gets in the way of a succession plan b. market competition is heating up c. the family doesn't want the business d. the government requires it

a. the entrepreneur's ego gets in the way of a succession plan

50. A business plan should illustrate a. the projected results of the new business b. the current status of a related enterprise c. the desires of competitors d. changes in borrowing practices

a. the projected results of the new business

42. One advantage of an early entry strategy for the younger generation succeeding the older generation of a family business is that a. the skills specifically required by the business are developed b. the perspective of the environment is broadened c. normal mistakes are viewed as incompetence d. the successor's skills are judged with more objectivity

a. the skills specifically required by the business are developed

38. Which of the following statements about the marketing skills of great entrepreneurs is true? a. they have a clear vision of what they want to achieve next b. they demonstrate persistence in their strategies c. they have no fears d. they are inattentive to details, focusing continually on the big picture

a. they have a clear vision of what they want to achieve next.

45. Which of the following is not one of the steps in reading a business plan? a. thorough reading of each section b. brief review of the history of the company c. establishment of the unique feature in this venture d. reading of the latest balance sheet

a. thorough reading of each section

Emerging ventures that are rapidly expanding with constantly increasing personnel size and market operations will need a. to formalize planning because there is a great deal of complexity b. to establish a pattern of subordinate participation c. to evaluate company strengths and weaknesses d. less formal planning because of constant changes

a. to formalize planning because there is a great deal of complexity

43. Upon completing the Build-Measure-Learn loop, startups confront the most difficult question any entrepreneur faces: a. to pivot or persevere b. whether to abandon the project c. all of these are correct d. whether to allocate additional resources

a. to pivot or persevere

When considering physical facilities, the entrepreneur should be concerned about a. which facilities are owned versus leased b. whether adequate capital is maintained c. facility upkeep d. which facilities are used for production

a. which facilities are owned versus leased

10. Which of the following statements would not be an appropriate guideline for successful business plan development? a. write the plan in first person b. do not over-diversify c. avoid exaggeration d. highlight critical risks

a. write the plan in first person

19. What does the author say to the question "How do I get my people to do what I want"? a. You can't b. need to pay them a lot c. fire them d. punish them

a. you can't

59. When using the internal rate of return method, the future cash flows are discounted at a rate that makes the net present value equal to a. zero b. assets minus liabilities c. assets minus (liabilities plus owners' equity) d. assets minus owners' equity

a. zero

34. Which of the following is not an activity in foundation of the Business Development Process? a. quantification b. innovation c. cost cutting d. orchestration

c. cost cutting

53. The managerial successor typically is not interested in a. effective use of resources b. efficiency c. creativity d. internal control

c. creativity

31. To an entrepreneur, one of the benefits of a business plan is that it identifies a. benchmarking measures for comparing forecasts with actual results b. profit strategies c. critical risks d. potential sources of financing

c. critical risks

23. What of the following is not a phase of business growth? a. adolescence b. maturity c. death d. infancy

c. death

Small business owners are often guarded about their businesses, which leads to a. a myopic viewpoint b. lack of attention to the competition c. distrust of others when formulating a strategic plan d. misunderstanding of the economic environment

c. distrust of others when formulating a strategic plan

_________ refers to conducting a thorough analysis of every facet of an existing business. a. industry capitalization b. knowledge acquisition c. due diligence d. risk assessment

c. due diligence

When calculating the total amount needed to buy a business venture, which of the following would not be included? a. professional services b. three months' operating expenses c. employee retention d. new inventory

c. employee retention

New ventures are important to the economy in terms of innovation and a. knowledge b. continuing the American way of life c. employment d. planning

c. employment

47. A ___________ model is one that fulfills the perceived needs of a specific segment of customers in an innovative way? a. business b. boss c. entrepreneurial d. management

c. entrepreneurial

15. Typically, slow page load times are affected by all of the following EXCEPT a. images and animinations b. custom fonts c. excess text d. all of these are correct

c. excess text

Which of the following strategies is not included in the "I-r" section of the entrepreneurial strategy matrix? a. move quickly b. protect innovation c. explore joint venture options d. lock in investment costs

c. explore joint venture options

71. Which of the following is an influencing factor in succession? Select one: a. current economic conditions b. the competition c. family and business cultural issues d. government regulation

c. family and business cultural issues

18. According to the family life cycle, all of the following are identified as stages in consumer buying behavior except a. nest building b. courting c. family traditions d. sole survivor

c. family traditions

43. In handling questionable costs, the cost in question is substituted first as a ___________ cost and then as a ____________ cost. a. total; fixed b. mixed; fixed c. fixed; variable d. variable; total

c. fixed; variable

A growth-oriented mind-set values a. growth b. internal political problems c. flexibility d. environmental uncertainty

c. flexibility

36. A trademark may be invalidated in all of the following ways except a. cleaning-out procedure b. cancellation proceedings c. generic words d. abandonment

c. generic words

7. How do we leave a good first impression? __________ a. all of these are correct b. good marketing plan c. good design d. great content

c. good design

42. What are the natural dispositions of every business? a. hide or run b. eat or sleep c. grow or contract d. fight or fly

c. grow or contract

25. What inevitably happens to the master juggler? a. he loses his job b. dies c. he drops some balls d. gets cancer

c. he drops some balls

42. Copyrights can be placed on all of the following except a. music b. books c. ideas d. lectures

c. ideas

49. Copyrights may be expressed in all of the following except a. books b. computer programs c. ideas d. motion pictures

c. ideas

62. Which of the following is a source of pressure outside the family that could prove troublesome? a. nepotism b. tax rate c. illness d. death

c. illness

26. When developing a survey, you should consider a. asking leading and biased questions b. giving concise but incomplete instructions c. including only questions pertaining to the study d. the personality of the respondents

c. including only questions pertaining to the study

Emotional bias is likely to have which of the following effects on a seller's valuation of a business? a. decrease the valuation b. an easier time negotiating c. increase the valuation d. no net effect on the valuation

c. increase the valuation

23. From an entrepreneur's standpoint, financial statement analysis is useful because it a. only displays a series of various ratios b. is helpful in creating the R&D budget c. is a way to anticipate conditions d. is good for predicting the future

c. is a way to anticipate conditions

41. The net present value method works on the premise that a dollar today a. is worth less than a dollar in the future b. cannot be measured in future dollars c. is worth more than a dollar in the future d. is worth the same in the future

c. is worth more than a dollar in the future

29. An indicator of the planning pitfall of "no realistic goals" is a. missed appointments b. excessive procrastination c. lack of timetable to accomplish things d. lack of desire to invest personal money

c. lack of timetable to accomplish things

70. Which of the following is not one of the major sections of the Bankruptcy Act? a. reorganization b. straight bankruptcy c. liquidation d. adjustments of debts

c. liquidation

Which of the following provides an absolute bottom line value of a firm? a. return on investment b. market value c. liquidation value d. price/earnings ratio

c. liquidation value

13. Sometimes a business plan is referred to as a(n) a. novelization b. encyclopedia c. loan proposal d. receivables exchange

c. loan proposal

24. Which of the following is not considered a step in the harvest strategy? a. publicize the offer to sell b. value the business c. look for a new venture to start up d. segregate the assets

c. look for a new venture to start up

3. What does MacDonald call its self "The most successful _________ in the world"? a. store b. corporation c. small business d. restaurant

c. small business

49. A _____________ experiment is one in which different versions of a product are offered to customers at the same time. By observing the changes in behavior between the two groups, one can make inferences about the impact of the different variations. a. centrally located b. blind test c. split-test d. none of these are correct

c. split-test

Some buyers are willing to pay more for a business than what valuation methods determine its worth to be avoid a. previous profits b. legal fees c. start-up costs d. earlier losses

c. start-up costs

Analysis of a firm's external and internal environments provides the firm with the information to develop a. competitive strengths b. administrative experience c. strategic intent and strategic mission d. a degree of uncertainty

c. strategic intent and strategic mission

A SWOT analysis refers to a. suppliers, workers, opportunities, and tactics b. scarcity, weaknesses, opportunities, and tactics c. strengths, weaknesses, opportunities, and threats d. strengths, warnings, options, and threats.

c. strengths, weaknesses, opportunities, and threats

41. For the author of creative material to obtain a copyright, the material must be in ________ form. a. commercial b. technical c. tangible d. nontangible

c. tangible

24. After Infancy most __________ lock the door? a. managers b. bosses c. technicians d. employees

c. technicians

37. The completed business plan provides the entrepreneur with a a. nicely designed booklet b. sense of well-being c. tool for communicating with financial sources d. product-launch timetable

c. tool for communicating with financial sources

17. The top level metric most webmasters obsess over is _____________. a. all of these are correct b. increase in subscribers c. traffic d. sales

c. traffic

23. _________ is what create a persuasive power. a. strategic planning b. all of these are correct c. trust d. good marketing

c. trust

37. ______________ is the process of demonstrating empirically that a team has discovered valuable truths about a startup's present and future business prospects. a. Control/assessment plan b. a strategic plan c. validated learning d. a marketing plan

c. validated learning

26. A cost that changes in the same direction and proportion to changes in operating activity is a a. fixed cost b. proportional cost c. variable cost d. variable receipt

c. variable cost

Which of the following are the three types of leadership of consequence to new ventures described by the text? a. competitive, innovative, and visionary b. competitive, innovative, and strategic c. visionary, strategic, and managerial d. visionary, managerial, and competitive

c. visionary, strategic, and managerial

When considering sales and distribution, the entrepreneur should be concerned about a. how sales vary with social demographics b. how many sales are internal c. whether any sales are made on cosignment d. how many distributors are necessary

c. whether any sales are made on consignment

19. Once a marketing campaign is planned, the next you must decide ________ you want to use to track its effectiveness. a. all of these are correct b. how much money c. which methods d. level of interest

c. which methods

33. "It's not your business you have to fear losing. It's something must bigger than that. It's __________?" a. your house b. your husband c. your self d. your dog

c. your self

Which of the following venture valuation methods is the most effective if the business being valued needs to generate a return greater than investment? a. price/earnings b. replacement value c. discounted future earnings d. adjusted tangible assets

c.discounted future earnings

68. _____ is the use of portable wireless devices to connect to the Internet. Select one: a. Social media marketing b. Entrepreneurial marketing c. Networking d. Mobile computing

d. Mobile computing

51. What business development step for small companies can have more impact than any other step mentioned in CH14? Select one: a. Business Development b. Menu Development c. Union Development d. Organizational Development

d. Organizational Development

66. In order to obtain a patent, an application should be filed with the a. Government Accounting Office b. Office of Government Publications c. United States Small Business Association d. Patent and Trademark Office of the Department of Commerce

d. Patent and Trademark Office of the Department of Commerce

4. Who said "Creativity thinks up new things"? a. Ronald Reagan b. Dr. Phil c. Barry Bonds d. Professor Levitt

d. Professor Levitt

64. Which of the following is an advantage of the business plan for financial sources? Select one: a. The plan helps investors learn about the future fixed and variable costs. b. The plan identifies sources of capital. c. The plan helps assess the entrepreneur's market niche. d. The plan identifies critical risks.

d. The plan identifies critical risks.

28. Which of the following statements regarding sole proprietorships is true? a. Ordinarily, the amount of capital available to proprietorships is equal to that available to other types of business organizations. b. proprietorships are taxed as businesses c. proprietorships have limited liability for the operation. d. a sole proprietorship is owned and operated by one person

d. a sole proprietorship is owned and operated by one person

70. A business plan is Select one: a. a blueprint of the product. b. an instance of entrepreneurial passion. c. the result of the new business. d. a written document that details the proposed venture.

d. a written document that details the proposed venture.

18. The recommended length of a business plan is a. 10 pages, at the maximum b. no more than 150 pages c. about 100 pages d. about 25 pages

d. about 25 pages

60. Approximately how many commercial banks are there in this country? a. about 20,000 b. about 17,000 c. about 40,000 d. about 5,500

d. about 5,500

40. The textbook recommends which of the following devices to help in the oral presentation of a business plan? a. rote memorization cues b. index cards c. mnemonies d. an outline

d. an outline

58. All of the following techniques are used in gather primary data except a. surveys b. observational methods c. experimentation d. analysis of financial records

d. analysis of financial records

57. Which of the following is a critical factor that should be discussed in the management segment? a. competitive analysis b. unfavorable trends in the industry c. size of manufacturing operaiton d. board of directors and consultants

d. board of directors and consultants

54. Which of the following is more likely than the others to be deemed a potential danger of social lending? a. regulatory certainty b. potential tax advantage c. high funding success rate d. business plan disclosure

d. business plan disclosure

69. The failure of a trademark owner to file an affidavit stating it is in use is referred to as which of the following trademark invalidation reasons? a. consumer loss of interest b. a competitor's lawsuit c. cancellation proceeding d. cleaning-out procedure

d. cleaning-out procedure

18. Cutting out the _____________ on a website will make the primary message more easily understood by visitors. a. number of ads b. number of links; How do you know your website is a success? c. number of pictures d. clutter

d. clutter

59. _____________ are inventing the future. a. all of these are correct b. academic programs c. skilled computer programmers d. college students

d. college students

22. The process of preparing a pro forma balance sheet is a. done first b. optional c. simple d. complex

d. complex

31. The Oakland Scavenger Company case is profound to owners of family businesses in that a. conceivably, the owner can be sued for not giving equal treatment to a son as to as daughter b. the owner can be fined for not declaring his or her first son the heir to the business c. conceivably, the owner can be sued for not declaring a family member his or her successor d. conceivably, the owner can be sued by an employee of a different ethnic origin based upon not being accorded the same treatment as a son or daughter.

d. conceivably, the owner can be sued by an employee of a different ethnic origin based upon not being accorded the same treatment as a son or daughter.

21. ____________ by traffic source is calculated using the same four traffic source categories: organic search, referral, direct, and social. a. all of these are correct b. market saturation c. KPIs d. conversion rate

d. conversion rate

64. Which of the following is not a contextual aspect to be considered in an effective succession plan? Select one: a. managerial ability b. entrepreneurial vision c. time d. cost

d. cost

89. Suppose and advertisement costs $100 and causes fifty new customers to sign up for the service. This as has a _________ of $2.00. a. none of these are correct b. average cost (AC) c. Cost of goods sold (COGS) d. cost per acquisition (CPA)

d. cost per acquisition (CPA)

18. Which of the following balance sheet ratios measures solvency? a. quick b. debt-to-worth c. cash d. current

d. current

21. The emerging body of law governing cyberspace is often referred to as a. netlaw b. a legal web c. interlaw d. cyberlaw

d. cyberlaw

37. Which of the following is not an example of a rule for your game from chapter 16? a. if you can't think of a good game, steal one. b. defense wins championships c. the game needs to be fun form time to time d. the game has to make sense

d. defense wins championships

48. Which of the following is not a trademark? a. logo b. name c. symbol d. description

d. description

6. The major thrust of the business plan, as defined in the textbook, is to a. provide a working document for the venture b. serve as a communication tool for the entrepreneur c. outline capital needs for the new venture d. encapsulate the strategic development of the project in a comprehensive document

d. encapsulate the strategic development of the project in a comprehensive document

72. ____________ are designed to give startups a relatively small set of metrics on which to focus their energies. a. search engine traffic b. the number of visitors to an organization's website c. paid promotion d. engines of growth

d. engines of growth

27. Which personality did Sarah say that she did not have? a. teacher b. technician c. manager d. entrepreneurial

d. entrepreneurial

49. The final critical factor in the marketing planning process is a. sales forecasting b. analysis c. cost projection d. evaluation

d. evaluation

67. Secondary data consist of Select one: a. external data only. b. newly developed primary research. c. internal data only. d. existing information.

d. existing information.

3. The process of trademark registration is a. inexpensive b. impossible c. one that must be handled by a lawyer d. expensive

d. expensive

Which of the following strategies is not included in the "I-r" section of the entrepreneurial strategy matrix? a. lock in investment costs b. move quickly c. protect innovation d. explore joint venture options

d. explore joint venture options

66. The first source for succession often is Select one: a. professional managers. b. friends of the family. c. nonfamily outsiders. d. family and in-house personnel.

d. family and in-house personnel.

45. What is the root cause of most small business failure? a. safety factors b. high cost c. low profits d. fatal assumption

d. fatal assumption

Which of the following is not perceived as a difficulty in long-range planning? a. inexperienced managers b. poor planning climate c. inadequately defined objectives d. favorable market conditions

d. favorable market conditions

15. There are ____________ steps for an entrepreneur to consider when creating a structured approach to a market plan. a. three b. seven c. four d. five

d. five

64. When using trend line analysis, how many periods are required? Select one: a. three b. two c. one d. five

d. five

Which of the following is a reason for buyers to keep projections in perspective? a. certain environments b. start-up costs c. vague histories d. fluctuating markets

d. fluctuating markets

13. The sales-driven philosophy a. is based on the belief that you must "produce efficiently and worry about sales later." b. relies on research to discover consumers preferences before production begins c. is strictly cost-driven d. focuses on personal selling and advertising to persuade customers to buy the company's output

d. focuses on personal selling and advertising to persuade customers to buy the company's output

28. Happenings that cause the replacement of the owner/manager of a family business are called a. abrupt happenings b. unforeseen difficulties c. legal events d. forcing events

d. forcing events

32. Where are all assumptions put to the test? a. basic model b. head quarters c. calibration station d. franchise prototype

d. franchise prototype

13. The starting point to measure your website's success - what are you _____________? a. traffic numbers b. KPIs c. all of these are correct d. goals

d. goals

33. A startup is __________ the sum of its parts. a. equal to b. none of these are correct c. less than d. greater than

d. greater than

Which of the following stages of venture development requires major changes in entrepreneurial strategy> a. business stabilization b. start-up activities c. new-venture development d. growth

d. growth

Goodwill, family members on the payroll, and planned losses are examples of a. analyzing a business b. underlying issues c. emotional bias d. hidden costs

d. hidden costs

29. Sometimes consumers associate a higher price with a. supply interruptions b. discounted cash flows c. product complexity d. higher product quality

d. higher product quality

7. Which of the following is the first step in the preparation of the cash-flow budget? a. identification of cash outflows b. identification of cash inflows c. identification and timing of cash outflows d. identification and timing of cash inflows

d. identification and timing of cash inflows

59. The text discusses all of the following important guidelines to follow when putting the plan together except a. avoiding exaggeration b. highlighting critical risks c. keeping the plan respectably short d. impressing with excessive detail

d. impressing with excessive detail

19. Which of the following is a demographic variable? a. weight b. attitude c. hair color d. income

d. income

55. Which of the following is not a suggestion a tax accountant or lawyer might make concerning tax reduction? a. give some or all of the owner's shares to heirs b. place real estate in a separate corporation c. establish a leasing subsidiary d. increase management's salaries and fringe benefits

d. increase management's salaries and fringe benefits

50. An entrepreneurial successor is someone who a. is loyal b. has a profit orientation c. has an administrative orientation d. is ingenious, creative, and driven

d. is ingenious, creative, and driven

53. Which of the following statements about a business plan is true? a. it allows the entrepreneur to avoid pitfalls in starting a new venture b. it describes the entrepreneur's ideas and thoughts c. it is the entrepreneur's road map for profits d. it is the minimum document required by any financial source

d. it is the minimum document required by any financial source

40. Despite the drawback of the payback method, the entrepreneur should continue to use it because a. it is inexpensive b. projects with a faster payback period normally have more favorable long-term effects c. it provides a faster return of funds over time d. it is very simple to use in comparison with other methods

d. it is very simple to use in comparison with other methods

45. Which of the following is recognized as a disadvantage of partnerships? a. direct rewards b. ease of formation c. possible tax advantages d. lack of continuity

d. lack of continuity

36. __________ is the essential unit of progress for startups. a. the number of customers b. the volume of sales c. profitability d. learning

d. learning

48. Which of the following statements about seeking legal advice with respect to succession planning is true? a. the more you pay, the better the advice b. legal advice is seldom beneficial c. legal advice from an advisor who understands succession issues is always crucial d. legal advice is not critical, but beneficial

d. legal advice is not critical, but beneficial

37. An infringement budget deals with a. government bribes b. claims c. advertising expenditures d. legal battles

d. legal battles

30. "Your business and your _________ are two totally separate things"? a. profits b. family c. body d. life

d. life

29. Which of the following can provide a structure that facilitates investments in socially beneficial, for-profit ventures? a. limited partnership b. limited liability partnership c. S corporation d. low-profit, limited liability company (L3C)

d. low-profit, limited liability company (L3C)

21. The _________ is defined by how man technicians he can supervise effectively or how many subordinate managers he can organize into a productive effort? a. executive b. boss c. technician d. manager

d. manager

The past is the best predictor of the future according to the __________ mind-set. a. entrepreneurial b. cognitive c. risk-averse d. managerial

d. managerial

41. The __________ is that version of the product that enables a full turn of the Build-Measure-Learn loop with a minimum amount of effort and the least amount of development time. a. last batch b. first c. best d. minimum viable product (MVP)

d. minimum viable product (MVP)

36. What is the first standard of a strategic objective? a. competitors b. customers c. location d. money

d. money

44. Many companies continue to use the payback method because it is a. an immediate cash payment b. inexpensive to use c. a longer loan program d. more favorable in its short-term effects on earnings

d. more favorable in its short-term effects on earnings

11. Earning _________ is an essential goal for any blogger. a. kpi's b. attention c. all of these are correct d. new subscribers

d. new subscribers

34. To establish a sole proprietorship, a person needs to a. obtain owner stock b. carefully assume their shares in the profits. c. legalize financial documents d. obtain whatever local and state licenses are necessary.

d. obtain whatever local and state licenses are necessary

12. Even if SEO is less prevalent than it used to be, the __________ traffic will give you an idea of how well your website ranks in the search engines. a. week over week b. best c. all of these are correct d. organic search

d. organic search

46. A typical symptom of impending bankruptcy is when a. new competition exists the market b. retailers always seem to be understocked c. the entrepreneur seeks to exist the market d. other firms seem to be selling products that are a generation ahead.

d. other firms seems to be selling products that are a generation ahead.

7. Which of the following survey methods is the most expensive to conduct? a. phone surveys b. group surveys c. mail surveys d. personal interviews

d. personal interviews

25. It is important that an entrepreneur a. seek the assistance of outside professionals to prepare a business plan b. develop a rough business plan and then seek outside professional assistance c. develop an entrepreneurial team to organize the plan d. prepare his or her own plan

d. prepare his or her own plan

59. A written succession strategy. a. is part of an entrepreneur's will b. must be reviewed by the family c. must be reviewed by the government d. prepares the entrepreneur for developing a management continuity strategy and policy

d. prepares the entrepreneur for developing a management continuity strategy and policy

Chapter 14 Quiz When comparing and contrasting major competitors along core competitive dimensions, you should include a. employees, suppliers, and competitors b. profits, price, and product c. profits, sales, and operating ratios d. product, technology, and distribution

d. product, technology and distribution

13. The ___________ a startup builds are really experiments. a. organizational strategies b. vision plans c. management strategies d. products

d. products

24. Comparing financial numbers in order to make decisions is referred to as a. debt reduction b. comparable fractions c. descriptive statistics d. ratio analysis

d. ratio analysis

4. Advantages of debt financing include all of the following except a. potential greater return on equity b. no relinquishment of ownership c. low interest rate that justify the opportunity cost d. regular interest payments

d. regular interest payments

68. Blueprints, sketches, drawings, and models are often important features to be placed in which of the following sections of the business plan? Select one: a. critical risks b. manufacturing c. marketing d. research, design and development

d. research, design and development

20. Every game has to have __________ for people to be good at it? a. cheer leaders b. bleachers c. trophies d. rules

d. rules

11. Loan proceeds are not directly tied to a. planned expansion of a firm b. meeting cash-flow problems c. expenses d. sales revenue

d. sales revenue

60. Through the use of __________ as our yardstick, we can discover and eliminate the sources of waste that are plaguing entrepreneurship. a. in depth research b. management principles c. competitive analysis d. scientific learning

d. scientific learning

51. Which of the following steps should be carried out second when deciding to sell a business? a. publicize the offer to sell b. finalize the prospective buyers c. value the business d. segregate the assets

d. segregate the assets

28. Why did Elizabeth quit working for Sarah? a. Sarah fired her b. her mom died c. she got sick d. she got a new job

d. she got a new job

61. The amount of time a company can count on holding on to market leadership to exploit its earlier innovations is ____________. a. about the same b. growing c. irrelevant d. shrinking

d. shrinking

55. The one envelop at a time approach is called "single-piece flow" in lean manufacturing. It works because of the surprising power of ____________. a. strategic planning b. focusing on a narrow niche c. all of these are correct d. small batches

d. small batches

19. Which of the following statements about the characteristics that successors should possess is true? a. there are only a few characteristics needs b. situation does not matter c. knowledge of the firm is not a desirable characteristic or quality. d. some characteristics will be more important than other, depending on the situation.

d. some characteristics will be more important than other, depending on the situation.

39. If the numbers for early experiments don't look promising, there is clearly a problem with the _____________. a. numbers b. product c. method of measuring d. strategy

d. strategy

35. A ___________ is a set of things, actions, ideas, and information that interact with each other, and in so doing, alter other systems? a. assembly line b. plan c. robot d. system

d. system

32. Which of the following does not represent a category of angel investors? a. micromanagement angels b. corporate angels c. entrepreneurial angels d. technology angels

d. technology angels

9. The "growth hypothesis" _________ how new customers will discover a product or service. a. validates b. surveys c. measures d. tests

d. tests

42. The second section of a business plan is a. a statement of purpose and goals b. the summary c. a statement of financing goals d. the business description

d. the business description

14. Which of the following is part of the marketing segment? a. plans for specific TV ads b. plans for gaining shelf space c. entry barriers d. the competitive analysis

d. the competitive analysis

39. Which of the following falls under Chapter 7 bankruptcy? a. The debtor fails to file income taxes b. the debtor is arrested c. the debtor surrenders most property to a court trustee d. the debtor is relieved of obligations

d. the debtor is relieved of obligations

27. In the simple linear regression analysis equation, Y = a + bx, Y represents a. expected sales b. the vertical intercept c. the slope of the line d. the dependent variable

d. the dependent variable

16. Surprisingly, entrepreneurs frequently forget to include _________ in the business plan. a. a customer endorsement b. the return address or phone number c. the month and year the plan is issued d. the name of the company

d. the name of the company

A drawback to the price/earnings ratio method is that a. it is relatively easy to find a truly comparable publicly held company, even in the same industry b. the stock of a private company is publicly traded c. it distorts profits earned d. the stated net income of a private company may not truly reflect its actual earning power

d. the stated net income of a private company may not truly reflect its actual earning power

20. In the production budget for a manufacturing firm, the number of units needed in inventory is determined by a. the sum of beginning inventory and expected sales b. an inventory model c. the sum of beginning inventory and desired ending inventory d. the sum of the desired ending inventory and the number of units to be sold

d. the sum of the desired ending inventory and the number of units to be sold.

55. Which of the following statements about the financial assumptions is not true? a. they are the most integral part of the financial segment b. they should be clear and precise c. they explain how the numbers are derived d. they do not necessarily correlate with information from other parts of the business

d. they do not necessarily correlate with information from other parts of the business

6. The early franchise businesses were called "______________" Franchises? a. starter name b. cloning business c. repeat name d. trade name

d. trade name

Chapter 15 Quiz 1. Which of the following is not a step in developing a succession strategy? a. understand contextual aspects b. identify successor qualities c. develop a written succession plan d. undertaking forcing events

d. undertaking forcing events

10. A ___________ is anything that makes you feel good about your site's progress, without telling you anything about your business. a. kpi b. all of these are correct c. successful marketing plan d. vanity metric

d. vanity metric

79. The goal of every startup experiment is to discover how to build a sustainable business around the entrepreneur's ___________. a. desired level of profitability b. level of investment c. investors' demands d. vision

d. vision

23. The critical first question for any lean transformation is: a. who will be responsible for the planning and implementation of the strategic plan? b. All of these are correct c. how will the research be done for the development of the marketing plan? d. which activities create value and which are a form of waste?

d. which activities create value and which are a form of waste?

27. Skipping a stage of __________ and moving directly to the design stage is a pretty common mistake among many product teams. a. identifying its key audience b. market identification c. finding new words d. defining global goals

defining global goals

16. The average size of social loans is around $17,000. True. False.

True

71. Informal risk capitalists are those who have already made their money and now seek to help new ventures. True False

True

46. The main objective of Regulation D is to a. make it easier and less expensive for small ventures to sell stock. b. increase investment in private placement. c. reduce debt financing by smell enterprises. d. regulate new small-business investment.

a. make it easier and less expensive for small ventures to sell stock.

4. Which of the following is a useful rule used to avoid pitfalls in selecting a trademark? a. never choose a trademark without first conducting a trademark search b. trust a lawyer's judgment c. copy a competitor's trademark d. avoid abbreviations and acronyms

a. never choose a trademark without first conducting a trademark search

36. Equity capital is a. not a loan but a form of stock. b. paid back after five years c. a loan from family d. paid back within one year

a. not a loan but a form of stock.

56. When going public with public offerings an advantage might be the a. size of the company's capital amount. b. company's size c. company's market share d. product price

a. size of the company's capital amount

34. Venture capitalists are quick to invest. True False

False

45. Common stock is the least basic form of ownership. True False

False

66. Peer-to-Peer lenders are friends of the entrepreneur who want to invest in the new venture. True False

False

9. What percentage of issued patents is considered commercially valuable? a. about half b. about a third c. a very large percentage d. a very small percentage

d. a very small percentage

35. Financing includes all of the following except a. angels b. equitable payback c. seed capital d. the owner's money

b. equitable payback

53. Because of how they are structured, traditional industries such as textiles, furniture manufacturing, and clothing manufacturing commonly use which of the following debt financing sources? a. trade credit b. factoring c. investing d. leasing

b. factoring

13. Because of the _________ doctrine, it is sometimes difficult to establish infringement. a. right to publish b. fair use c. acquisition d. freedom of information

b. fair use

15. When a trademark becomes the name of a general group of products or services, the trademark protection may be lost because of a. a cleaning-out procedure b. generic meaning c. abandonment d. cancellation proceedings

b. generic meaning

55. When securing a bank loan, which of the following is not a question an entrepreneur should be prepared to answer? a. When do you need it? b. What do you need it for? c. How do you need it? d. What is the price of your product?

d. What is the price of your product?

Chapter 9 1. Which of the following is a suggestion to minimize legal costs? a. visit the lawyer during normal hours of operation b. always handle matters personally c. try to avoid hiring a lawyer if and until an emergency requires it. d. have the lawyer custom design forms specifically for you.

a. visit the lawyer during normal hours of operation

13. Which of the following is a source of capital for entrepreneurs? a. auto leasing b. equity c. mortgages d. debit

b. equity

Chapter 8 1. An informal risk capitalist is referred to as: a. a crowfunder b. a retiree c. a business angel d. your neighbor

c. a business angel

14. __________ bank loans are made on a discounted value of the receivables pledged. a. Peer-to-Peer b. Trade lending c. Convertible stock d. Accounts receivable financing

d. Accounts receivable financing

58. Long-term debt is used for a. the payment of payroll b. recurring purchases c. a rainy day fund d. the purchase of property or equipment

d. the purchase of property or equipment

12. It often is possible to obtain more capital and a better range of skills in a sole proprietorship than in a partnership. True False

False

62. Social lending sites are different from so-called microlending sites. True False

True

10. Works created after January 1, 1978, have a copyright for the life of the author plus a. 50 years b. 70 years c. 14 years d. 10 months

b. 70 years

6. Which of the following statements about raising capital is true? a. all capital is raised through formal sources. b. capital is easy to get. c. all capital is raised through debt sources. d. it often takes a great deal of time to raise capital.

d. it often takes a great deal of time to raise capital.

29. One of the advantages of public offerings is a. disclosure b. requirements c. cost d. image

d. image

22. Large ventures often use private placements as a method of raising capital. True False

False

26. Informal risk capitalists are often referred to as business angels. True False

True

5. Regulation D defines separate exemptions that are based on the amount of money being raised. Which of the following is not a rule that accompanies these exemptions? a. Rule 503 b. Rule 506 c. Rule 505 d. Rule 504

a. Rule 503

44. The Regulation D exemptions include all of the following except a. Rule 503-placements of less than $500,000. b. Rule 506-placements in excess of $5 million. c. Rule 504-placements up to $1 million. d. Rule 505-placements of up to $5 million

a. Rule 503-placements of less than $500,000.

2. Which of the following is not a question commonly asked by banks of entrepreneurs? a. What interest rate did you have in mind? b. How much do you need? c. How will you repay the loan? d. What do you plan to do with the money?

a. What interest rate did you have in mind?

6. A B corporation's legal structure expands corporate accountability to encompass all of the following except a. comprehensive and transparent social performance standards b. comprehensive and transparent Internet standards c. society's greater good d. higher legal accountability standards

a. comprehensive and transparent social performance standards

17. Legal protection is granted to computer programs in which of the following forms? a. copyright b. patent c. service mark d. trademark

a. copyright

69. Which of the following would be most commonly used for intermediate-term financing? a. leasing companies b. insurance companies c. trade credit d. finance companies

a. leasing companies

7. Which of the following is not a type of debt financing? a. private placement b. accounts receivable c. finance companies d. trade credit

a. private placement

48. A disadvantage of debt financing is a. regular interest payments b. relinquishment of ownership c. inhibition of growth and development due to equity investments d. possible cash flow enhancement

a. regular interest payments

40. The most common source of debt financing is a. finance companies b. commercial banks c. factoring d. trade credit.

b. commercial banks

3. Many new ventures find that debt financing is a. a waste of time. b. necessary. c. a minor source of funds d. not an important consideration.

b. necessary

18. To effectively pursue a patent violation, experts recommend that the entrepreneur a. fill out a preprinted form obtained from a patent office b. prepare a realistic budget for infringement c. sue as quickly as possible d. handle all matters personally

b. prepare a realistic budget for infringement

76. Financial equity instruments, which give investors a share of the ownership, may include? a. donations b. loans without warrants c. preferred stock d. option sales

c. preferred stock

41. ____________ is one of the disadvantages of going public. a. liquidity b. form 8-K c. Shareholder pressure d. value

c. shareholder pressure

73. Which of the following is not one of most common questions typically required to be answered by entrepreneurs seeking funding? a. What do you plan to do with the money? b. How much money do you need? c. What exact date will you repay the money? d. When do you need to money?

d. When do you need to money?

8. Venture capital in the United States has been highest in which of the following? a. data mining b. food services c. nanotechnology d. health care

d. health care

59. Which of the following is an important question for the entrepreneur to ask when evaluating the venture capitalist? a. Does person have a degree? b. Is the person a close relative? c. Is the person wealthy? d. How many deals has the firm actually made in this field?

d. How many deals has the firm actually made in the field?

72. Which of the following is an unimportant question for the entrepreneur to ask when evaluating the venture capitalist? a. Does person have a degree? b. Is the person wealthy? c. Is the person a close relative? d. How many deals has the firm actually made in this field?

d. How many deals has the firm actually made in this field?

15. Entrepreneurs with new ventures often use debt financing out of choice, not necessity. True. False.

False

2. Design patents last for 20 years. True False

False

31. Venture capitalists, surprisingly, require little information before they make an investment. True False

False

57. Corporate venture capital can offer strategic and tactical advice, an operating budget, and credibility but started to decline in 2017, and this trend is expected to continue. True False

False

14. The object of a patent is to provide the holder with a temporary monopoly on his or her innovation. True False

True

20. Because the advantages of going public outweigh the disadvantages, it is in a corporation's best interest to go public. True False

False

25. Public offering is a term used to refer to corporations taking public donations to raise capital. True False

False

65. Equity financing is money invested in the venture with legal obligations to repay the principle amount of pay interest on it. True False

False

16. A Chapter 11 proceeding allows the business to operate as a(n) __________, which means that the court appoints a trustee to oversee the management of the business. a. nonexempt property b. debtor-in-possession c. liquidation d. unsecured debtor

b. debtor-in-possession

37. Which of the following is not one of the eight critical factors that venture capitalists use in the evaluation of new ventures? a. lead time b. timing of entry c. managerial structure d. scope

c. managerial structure

63. SBIC stands for a. small business in capital b. securities, bonds, investment, capital c. small-business investment companies d. sources of business investment companies

c. small-business investment companies

38. Which of the following would be most commonly used for long-term financing? a. finance companies b. trade credit c. insurance companies d. leasing companies

c. insurance companies

30. When starting a business, which of the following sources of financing is least likely to be used? a. leasing companies b. trade credit c. factors d. insurance companies

d. insurance companies

23. Which of the following terms is synonymous with social lending? a. accounts receivable lending b. government-backed lending c. tax lending d. peer-to-peer (P2P) lending

d. peer-to-peer (P2P) lending

9. Which of the following would be most commonly used for short-term financing? a. finance companies b. insurance companies c. leasing companies d. trade credit

d. trade credit

61. Venture Capitalists are experienced professionals who provide a full range of services for new ventures including a. market research and strategy for pricing b. management consulting c. supplying labor for start-up d. R&D knowledge

b. management consulting

11. Which of the following is not a major trend that has occurred in venture capital over the last few years? a. more specialized funding b. emerging syndicated deals c. more innovation d. stronger small start-up investments

d. stronger small start-up investments

Avoiding start-up costs is a factor to consider when valuing a business. True False

True

Business valuation is essential when attempting to buy out a partner. True False

True

Buyers and sellers assign different values to a business. True False

True

Chapter 11 1. The pro forma income statement is prepared before the pro forma balance sheet. True False

True

During the growth stage of a venture, entrepreneurs shift into a managerial style True False

True

Entrepreneurs should try to be as objective as possible in determining the fair market value of their enterprise. True False

True

High- and low-performing firms have many similarities and differences in their long-range planning efforts. True False

True

In a management structure, there is a need for clearly defined authority and responsibility. True False

True

Increasing market share by acquiring a firm in the company's industry is one reason for the acquisition. True False

True

20. Typical Outbound Marketing Strategies include all of the following EXCEPT a. all of these are correct b. tv, print, and radio advertising c. public relations campaigns d. direct mail

a. all of these are correct

22. The technician has just reached the limits of his ________ zone? a. comfort b. profit c. rest d. stress

a. comfort

11. A market is a a. group of consumers who have purchasing power and unsatisfied needs b. segment of the economy c. way of gaining consumer data d. group of known purchasers

a. group of consumers who have purchasing power and unsatisfied needs

39. A ________ sets the tone for all of the activities, and it gives a context that helps in making design decisions. Select one: a. strategy b. well defined Marketing Plan c. well defined Social Media plan d. All of these are correct

a. strategy

10. The Lean Startup methodology reconceives a startup's effects as experiments that _____________ its strategy to see which parts are brilliant and which are crazy. a. test b. All of these are correct c. manage d. direct

a. test

30. Ratio analysis can be applied from which of the following directions? a. vertical and horizontal b. vertical only c. external and internal d. horizontal only

a. vertical and horizontal

Goodwill, patents, deferred financing costs, and other intangible assets are considered when computing a. capitalized earnings b. the adjusted tangible book value c. inventory value d. the fixed price value

b. the adjusted tangible book value

36. One of the easiest capital budgeting methods to understand is a. the internal rate of return b. the payback method c. the strategic analysis approach d. net present value

b. the payback method

60. What is meant by product life cycle pricing? a. the pricing of new products needs to start out low and end high b. the pricing needs to be adjusted at each stage in a product's life cycle c. the pricing needs to be increased at each stage in a product's life cycle d. the pricing of new products needs to start out high and low

b. the pricing needs to be adjusted at each stage in a product's life cycle

When considering employees, the entrepreneur should be concerned about a. the total number of female employees b. the total number of employees by function c. employee productivity d. the total number of single employees

b. the total number of employees by function

66. Which of the following is the contribution margin approach formula? Select one: a. (FC - VC)S - SP b. FC = (SP - VC) c. (SP - VC)S - FC d. SP(FC - VC)S

c. (SP - VC)S - FC

15. Research shows that many privately held firms go out of business within _______ year(s). a. 2 b. 1 c. 10 d. 25

c. 10

69. An inventory turnover ratio of 9.81 means that the average dollar volume of inventory is used up almost _____ time(s) during the fiscal year Select one: a. 100 b. 1 c. 10 d. 1.2

c. 10

35. Which of the following explains how death affects the duration of a corporation? a. A corporation is usually unaffected by the death of a shareholder unless a general partner dies b. A corporation is affected by the death of a shareholder c. A corporation is unaffected by the death of a shareholder. d. A corporation usually terminates on the death of a founding shareholder.

c. A corporation is unaffected by the death of a shareholder.

41. There are several different ways you can generate data with which to form a specific metric. They include all the following EXCEPT Select one: a. Individual visitors b. Lead conversion c. All of these are correct d. Web Content

c. All of these are correct

56. What is the "It" of Sarah's business? Select one: a. Pies b. Good Machines c. Caring d. Sales

c. Caring

15. When developing a Market Strategy it is important to forget about what you want and consider what the __________ wants? a. Owner b. Business c. Customer d. Technicians

c. Customer

55. The Franchise model uses workers with the ________ level of skill? Select one: a. Most b. Highest c. Lowest d. Moderate

c. Lowest

11. What step is after Organizational Strategy in the business Development Program? a. Closing Strategy b. Cost Strategy c. Management Strategy d. Mission Statement Strategy

c. Management Strategy

Which of the following is not an underlying issue when determining proper valuation of the venture set to be acquired? a. the reasons for the acquisition b. the emotional bias of the seller c. the amount of risk involved in an acquisition d. the differing goals of a buyer and seller

c. the amount of risk involved in an acquisition

56. The determination of fair use of a copyrighted material is based on a. the time period involved b. the GAD doctrine c. the effect of use on the potential market for the work d. specific legal guidelines set forth by OSHA.

c. the effect of use on the potential market for the work.

37. Which of the following is needed to prepare a pro forma balance sheet? a. assets b. owners' equity c. the last balance sheet prepared before the budget period began d. liabilties

c. the last balance sheet prepared before the budget period began

3. Which of the following is not one of the four strategies that can be used in preparing a management succession policy? a. the owner controls the management continuity strategy entirely b. the owner works with a professional advisor on the management continuity strategy c. the owner's family controls the management continuity strategy entirely. d. the owner works with his or her family on the management continuity strategy.

c. the owner's family controls the management continuity strategy entirely.

48. How many months of the year should be illustrated in the first pro forma income statement? a. 3 b. 6 c. 8 d. 12

d. 12

8. Patents that are not design patents have ________ years of protection. a. 25 b. 15 c. 22 d. 20

d. 20

44. The average life expectancy of a privately held business is ________ years. a. 10 b. an indefinite number of c. 50 d. 24

d. 24

7. In 2000 franchise businesses were responsible for _________% of every retail dollar? a. 40 b. 93 c. 30 d. 50

d. 50

Analysis of a firm's external and internal environments provides the firm with the information to develop a. competitive strengths b. a degree of uncertainty c. administrative experience d. strategic intent and strategic mission

d. strategic intent and strategic mission

25. The essential lesson the be learned from small batch sizes is that by reducing batch sizes, organization can get through the ____________ more quickly than competitors. a. planning process b. strategic cycle c. manufacturing process d. All of these are correct. e. Build-Measure-Learn feedback loop

e. Build-Measure-Learn feedback loop

18. Regulation D augments the regulations for reports and statements required for selling stock to private parties, friends, employees, customers, relatives, and local professionals. True. False.

False

19. Innovation accounting will still work even if a startup is being misled by vanity metrics such as gross number of customers and so on. True False

False

19. The major purpose of a business plan is its utilization as a working document. True False

False

2. The pro forma balance sheet is used in the critical risk segment of the business plan. True False

False

2. The traditional accounting equation is: Assets + Liabilities = Owners' Equity. True False

False

21. An entrepreneur must graph at least two numbers-total sales and total expenses-when using the graphic approach for break-even analysis. True False

False

21. Financial sources benefit from the prospective financial statements found in a business plan because it allows them to locate any miscalculations. True False

False

22. A marketing information system compiles and organizes data according to a customer's sex, age, and geographic location. True False

False

22. The easiest way to avoid the pitfall of no commitment or dedication is to designate that the venture is a hobby or a whim. True False

False

23. Attorney-hopping is the best way to keep legal fees to a minimum. True False

False

23. Sales forecasting is a process of projecting future sales through educated guesses. True False

False

23. The manufacturing segment of the business plan should identify key personnel, their responsibilities and positions, and career experience that qualifies them for those particular roles. True False

False

24. After delivering a pitch, it is not acceptable to question venture capitalists who turn down a funding opportunity. True False

False

3. Most tools from general management are designed to flourish in the harsh soil of extreme uncertainty in which startups thrive. True False

False

30. Timing considerations generally do not impact decisions to sell a business because triggering events are unanticipated. True False

False

31. The first step in the preparation of the cash-flow budget is the identification and timing of cash outflows. True False

False

32. There are only two viewpoints from which a business plan should be written: the entrepreneur's and the financial source. True False

False

33. Pricing procedures are the same for all types of ventures. True False

False

35. A delay in the launch day assists many startups in getting the feedback they need. True False

False

35. Control versus communication is an important distinction between social media marketing and traditional marketing. True False

False

36. The role of the customer in social media marketing is as an external source of intelligence and feedback. True False

False

37. It is not necessary for the entrepreneur to seek professional advice and legal counsel when liquidating the firm. True False

False

38. Chapter 13 bankruptcy involves a reorganization of the enterprise. True False

False

39. Capital budgeting is used to help the entrepreneur plan for capital depreciation. True False

False

39. Planning is not essential to the success of an undertaking. True False

False

41. In the marketing shift from the 4Ps to the 4Cs, price shifts to choice and promotion shifts to communities. True False

False

42. Most firms generally gather primary data and then see if there are secondary data to supplement it. True False

False

43. The entrepreneur should expect to encounter a friendly and supportive audience when presenting the business plan to potential financial sources. True False

False

45. An important issue in the Oakland Scavenger Company case was that of whether nonfamily members should be allowed to be successors in family businesses. True False

False

46. A head start is usually large enough to matter, and time spent in stealth mode - away from customers - is likely to provide a head start. True False

False

5. Turn-Key Revolution started in what fast food restaurant? a. Wendy's b. Taco Bell c. Burger King d. MacDonald's

d. MacDonald's

12. Learning milestones are useful for entrepreneurs as a way of assessing their progress accurately and objectively; they are also invaluable to managers and investors who must hold entrepreneurs accountable. True False

True

12. The steps in developing a succession strategy are understanding the contextual aspects, identifying successor qualities, and developing a written succession plan. True False

True

12. Trade credit is given by suppliers who sell goods on account. True. False.

True

13. Some entrepreneurs are easy to replace, and some cannot be replaced. True False

True

14. The first type of expense to be estimated when preparing an operating budget is cost of goods sold. True False

True

15. One of the most vexing aspects of the minimum viable product is the challenge it poses to traditional notions of quality. True False

True

16. The goal of a minimum viable product is to begin the process of learning, not end it. True False

True

17. The business plan is the entrepreneur's road map for a successful enterprise. True False

True

18. The innovation accounting framework makes it clear when the company is stuck and needs to change direction. True False

True

2. The amount of time a company can count on holding on to market leadership to exploit its earlier innovations is shrinking, and this creates an imperative for even the most entrenched companies to invest in innovation. True False

True

2. There are two types of succession pressures: family member and nonfamily employees. True False

True

21. Social media marketing is the application of online collaborative media for marketing purposes. True False

True

21. Sometimes a successor is needed because the business environment changes and a parallel change is needed at the top. True False

True

22. Even tracking the most basic of numbers relating to your website will give you an advantage over someone who doesn't bother at all. True False

True

22. The forcing events that require an entrepreneur to step aside and let someone direct the operation are usually unforeseen and create major problems for the business. True False

True

23. A buy/sell agreement can be used to make certain that funds are available to purchase the ownership interest. True False

True

24. The importance of small-batch approach produces a finished product every few seconds, whereas the large-batch approach must deliver all the products at once, at the end. True False

True

24. To be clear, there's nothing wrong with keeping an eye on data points that are not directly related to your main objectives. True False

True

25. If infringement can be proven in court, a monetary award may be given to the trademark holder. True False

True

25. When using regression analysis, the entrepreneur may draw conclusions about the relationship between product sales and advertising expenditures. True False

True

27. More than one engine of growth can operate in a business at a time. True False

True

36. ___________ shows how many visitors come from other websites—either because you wrote a guest post, or because another website linked to your content. Select one: a. Referral traffic b. All of these are correct. c. Organic traffic d. new traffic

a. Referral traffic

12. What did the Boss offer the manager when he first started working for the hotel? This gesture was very surprising to the manager. a. a cup of coffee b. lunch c. new dog d. hug

a. a cup of coffee

54. In a survey of 1,0000 business owners, which of the following was a motivation for an entrepreneur to sell a venture? a. a desire for liquidity b. legal advice received c. too many heirs within the company d. the company getting too big

a. a desire for liquidity

61. Promotion from within is a. a morale-building philosophy b. a sure way to measure profitability c. usually a bad idea d. seldom effective

a. a morale-building philosophy

25. Rather than looking only at sales and revenue, web-and-app brands have to look at ____________. a. all the avenues through which consumers engage with them b. Google Analytics c. all of these are correct d. customer feedback

a. all the avenues through which consumers engage with them

29. Rather than looking only at sales and revenue, web-and-app brands have to look ____________. a.. all the avenues through which consumers engage with them. b. google analytics c. customer feedback d. all of these are correct

a. all the avenues through which consumers engage with them.

65. A common problem entrepreneurs can fall victim to is ___________, endlessly refining their plans. a. analysis paralysis b. identifying their unique customers c. all of these are correct d. finding the right product or service

a. analysis paralysis

32. Which of the following is not one of the most common methods used in capital budgeting? a. anticipated change in net income method b. payback method c. internal rate of return method d. net present value method

a. anticipated change in net income method

In the context of buying a business, a known commodity may command a higher price for which of the following reasons? a. avoiding start-up costs has value b. property values are variable c. historical projections have intrinsic value d. the value of a founder's stock decreases over time

a. avoiding start-up costs has value

17. Penetration pricing is setting the price to a. be below competition b. match the competition c. maximize profit d. switch customers to new product lines

a. be below competition

36. Which of the following statements may be the most important in new venture creation? a. cash-flow statement b. income statement c. pro forma balance sheet d. profit statement

a. cash-flow statement

40. Which of the following statements regarding communication after the sale is true? a. communication is a key step between the seller and the buyer and between the buyer and the current management personnel b. communication should end at the time the buy agreement is signed c. communication should end at least 10 days prior to signing a buy agreement d. continued communication through the transition to new ownership is not critical

a. communication is a key step between the seller and the buyer and between the buyer and the current management personnel

68. The rate used to adjust future cash flows to determine their value in present period terms is the Select one: a. cost of capital. b. current interest rate. c. present value. d. rate determined by the ratio of assets to liabilities.

a. cost of capital.

67. A patent infringer can be liable for all _________ resulting from the infringement as well as for legal fees. a. damages b. claims c. profits d. costs

a. damages

61. The owner of a copyright may do all of the following except a. deduct the intrinsic value of the rights from one's taxes. b. perform the work publicly c. reproduce the work d. display the work publicly

a. deduct the intrinsic value of the rights from one's taxes

47. A harvest plan a. defines when and how owners and investors will realize and actual cash return on their investment b. is simple to implement c. is similar to a will d. leaves the business to the next generation

a. defines when and how owners and investors will realize and actual cash return on their investment

32. Marketing segmentation focuses on which of the following variables? a. demographics b. market shares c. profits d. consumer behaviors

a. demographics

8. Which of the following statements is not part of the "five-minute reading" by venture capitalists? a. determine the strengths and weaknesses of the entrepreneur b. determine the characteristics of the venture and industry c. read the latest balance sheet d. determine the financial structure of the plan

a. determine the strengths and weaknesses of the entrepreneur

27. According to the U.S. Patent and Trademark Office, the process of obtaining a patent take about _______ years. a. 6 b. 3 c. 4 d. 2

b. 3

44. According to the Small Business Administration more than _________ such business close every year? a. 1,000,000 b. 600,000 c. 900,000 d. 750,000

b. 600,000

67. When considering financial difficulties, which of the following statements constitutes a forcing event? Select one: a. The business has record losses over a holiday season. b. A lender demands the removal of an owner/manager before lending the necessary funds. c. The business does not make a substantial profit for the first year of business. d. The business has a loss for one quarter.

b. A lender demands the removal of an owner/manager before lending the necessary funds.

61. Which of the following is the traditional accounting equation that verifies the accuracy of the entrepreneur's balance sheet? Select one: a. Assets + Owners' Equity = Liabilities b. Assets = Liabilities + Owners' Equity c. Assets + Liabilities = Owners' Equity d. Assets = Liabilities - Owners' Equity

b. Assets = Liabilities + Owners' Equity

17. A startup's job is to a. rigorously measure where it is right now, confronting the hard truths that assessment reveals. b. Both of these are correct c. devise experiments to learn how to move the real numbers closer to the ideal reflected in the business plan.

b. Both of these are correct

50. Think of your company as a _________ instead of a partnership? Select one: a. Small Business b. Corporation c. Family Business d. E-Commerce

b. Corporation

16. Probably the main method to measure traffic and other data that has to do with the traffic pertaining to your website is ____________. While their are other methods, this is the main method used by most online companies. a. SAS b. Google Analytics c. SPSS d. Red Hat

b. Google Analytics

67. Which of the following questions should an entrepreneur ask when a business plan is turned down? Select one: a. Can you identify friends who would like this kind of deal? b. If you were in my position, how would you proceed? c. Can I ask you why you didn't like me? d. Can't you recognize a good plan when you see one?

b. If you were in my position, how would you proceed?

32. Which of the following individuals defined the corporation as "an artificial being, invisible, intangible, and existing only in contemplation of the law?" a. Henry Ford b. Justice John Marshall c. Karl Marx d. Thomas Jefferson

b. Justice John Marshall

13. Your _________ Plan shapes your life, and the business that is to serve it? a. Cost b. Life c. Career d. Business

b. Life

31. Which of the following is an indicator that an entrepreneur's business is failing? a. Other firms are selling advanced products. b. Obligations are greater than assets. c. The R&D budget is proportionally less than that of the competition. d. Retailers are overstocked.

b. Obligations are greater than assets.

31. ___________ is what creates a persuasive power. Select one: a. All of these are correct b. Trust c. Strategic planning d. Good marketing

b. Trust

54. You should build a business that works not because of you but ____________? Select one: a. Above you b. Without you c. In you d. For you

b. Without you

22. The decision to pivot requires a ____________. a. strong strategic plan b. a clear-eyed and objective mind-set c. All the above are correct d. excellent vision statement

b. a clear-eyed and objective mind-set

_________ give investors some protection against founders selling their interest to a third party. a. a voting right b. a co-sale right c. right of first refusal d. a registration right

b. a co-sale right

Many closely held ventures are undercapitalized, which often indicates a. lack of management depth b. a high level of debt c. insufficient controls d. divergent goals

b. a high level of debt

Closely held ventures usually suffer from which of the following shortcomings? a. internal conflict b. a lack of management depth c. overcapitalization d. insufficient controls

b. a lack of management depth

In an entrepreneurial culture, strategic orientation is driven by a. controlled resources b. a perception of opportunity c. employment of required resources d. coordination of activity

b. a perception of opportunity

58. The entrepreneur must be a. able to criticize the evaluators b. able to handle questions from the evaluators c. able to deftly avoid answering certain questions d. interesting and humorous

b. able to handle questions from the evaluators

40. The Lean Startup model offers a way to test an organization's hypotheses ____________. a. immediately b. all of these are correct c. rigorously d. thoroughly

b. all of these are correct

3. It is imperative that you use the __________ that are available to gather data today and use that data to shape continually future marketing campaigns toward being highly successful ones. a. third party, certified analysts b. analytical marketing tools c. outside consultants d. internal auditors

b. analytical marketing tools

47. The purpose of loss-leader pricing is to a. allow for future price increases b. attract customers to new products c. gain market share d. maximize profit

b. attract customers to new products

16. The more __________ a system is, the more effective your Franchise Prototype will be? a. Invisible b. automatic c. dependent d. hands on

b. automatic

31. The true product of the business is the __________ itself? a. inventory b. business c. name d. store

b. business

12. Investments in which returns are expected to extend beyond one year are referred to as a. mutual funds b. capital investments c. stocks d. bonds

b. capital investments

28. Promotion links to which of the 4Cs of marketing? a. choice b. communities c. customizable d. cocreated

b. communities

50. Which of the following influences the choice of marketing philosophy? a. stock market averages b. competitive pressure c. cost of living index d. economic outlook

b. competitive pressure

90. The Build-Measure-Learn feedback loop is a __________ process. a. short-term b. continuous c. long-term d. one time

b. continuous

54. The textbook recommends that social media marketers consider which of the following three aspects of social media when using those tools for marketing purposes? a. cost, complexity, and relevancy b. creating, enabling, and encouraging c. control, contribution, and distribution d. resource management, context, and content

b. creating, enabling and encouraging

39. Your marketing strategy starts, ends, lives, and dies with your ____________? a. product b. customer c. employees d. manager

b. customer

38. Barriers to successful succession planning, discussed in the text, include which of the following? a. nobody wanting to own the firm b. death anxiety c. lack of a final will d. lack of profits

b. death anxiety

Which of the following is the first step in the traditional pricing formula? a. estimate potential annual earnings of the buyer b. determine the adjusted tangible new worth c. determine the average annual net earnings d. discount future earnings

b. determine the adjusted tangible net worth

Potential earning power, which determines the true value of the firm, is best calculated using the __________ method. a. multiple of earnings b. discounted earnings c. price/earnings ratio d. adjusted tangible book value

b. discounted earnings

If cash flow is deemed to be the most important consideration in buying a business, which of the following valuation methods is likely to be used? a. adjusted tangible assets b. discounted future earnings c. high equity/low debt d. price/earnings

b. discounted future earnings

87. Because the Japanese car market after the war was so small and capital was not available, they were unable to do mass production and take advantage of __________. a. large machines in the factories b. economies of scale c. discounts for large purchases d. all of these are correct

b. economies of scale

76. Leadership requires creating conditions that __________ employees to do the kinds of experimentation that entrepreneurship requires. a. directs b. enables c. controls d. manages

b. enables

9. A key aspect to be considered in an effective succession is the a. family's wants and needs b. entrepreneur's vision c. marital status of the replacement d. profitability of the venture

b. entrepreneur's vision

6. A type of successor who is high in ingenuity, creativity, and drive would be considered a(n) _________ successor. a. innovative b. entrepreneurial c. opportunistic d. managerial

b. entrepreneurial

29. The ___________ is the dreamer in us? a. technician b. entrepreneurial personality c. idea man d. manager

b. entrepreneurial personality

61. A business plan _____ potential financial backers. Select one: a. provides an accurate sales forecast for b. establishes a first impression of the company and its principals on c. purposefully underestimates financial need for d. indicates the exact sum to be borrowed from

b. establishes a first impression of the company and its principals on

5. Skimming is setting the price to a. maximize market share b. maximize profit c. match the competition d. switch customers to new product lines

b. maximize profit

34. Which of the following is the greatest marketing challenge facing the cannabis industry? a. competition from the alcohol industry b. establishing a clean image c. distribution channel d. entry into trade shows

b. establishing a clean image

Which of the following is not a distinct form of tolerance for failure? a. uncontrollable failure b. experimental failure c. personal failure d. moral failure

b. experimental failure

The one-person-band syndrome is a. following a competitor's lead b. failure to delegate c. an invention d. effective time management

b. failure to delegate

35. Which of the following is not an important aspect of an entrepreneurial venture that must be described in a business plan? a. expected needs b. family support c. projected results d. current status

b. family support

43. The __________ Assumption states "if you understand the technical work of a business, you understand a business that does that technical work?" a. wrong b. fatal c. striking d. dangerous

b. fatal

21. When an organization starts making cuts that result in a slowdown of the ____________, all they have accomplished is to help the startup go out of business more slowly. a. implementation of the strategic plan b. feedback loop c. introduction of new products

b. feedback loop

35. With no doubt, the __________ of any website is now more important than ever. Select one: a. domain name b. first impression c. Content d. All of these are correct

b. first impression

53. Which of the following pricing models is not indicative of pricing in the social media age? a. freemium model b. growth stage model c. affiliate model d. subscription model

b. growth stage model

New venture managers lack knowledge in the strategic planning process because they a. attempt to implement actions too quickly b. have minimal exposure to the planning process c. are overconfident d. refuse to learn new things

b. have minimal exposure to the planning process

A business valuation is not usually essential when a. selling a business division b. hiring a new director of operations c. giving a gift of stock d. going public

b. hiring a new director of operations

38. ____________ analysis looks at financial statements and ratios over time. a. specific efficiency ratio b. horizontal c. inventory d. vertical

b. horizontal

35. Capital budgeting is designed to show a. which project is most profitable b. how many projects, in total, should be selected c. which of several mutually exclusive projects should be selected d. how to evaluate projected based on rates of return

b. how many projects, in total, should be selected

2. Which of the following statements about conventional marketing is not true? a. in terms of risk perspective, conventional marketers seek risk minimization b. in conventional marketing, the role of a marketer is that of internal and external change agent c. in conventional marketing, customers are viewed as sources of intelligence and feedback d. in conventional marketing, marketing is seen as an objective, dispassionate science

b. in conventional marketing, the role of a marketer is that of internal and external change agent

6. Which of the following statements about entrepreneurial marketing is not true? a. in terms of risk perspective, entrepreneurial marketers seek ways to mitigate, stage, or share risks. b. in entrepreneurial marketing, actions are constrained by resources currently controlled c. in entrepreneurial marketing, marketers seek sustainable advantage through value-creating innovation d. in entrepreneurial marketing, customers actively define the product

b. in entrepreneurial marketing, actions are constrained by resources currently controlled

51. Which of the following should be included in the business description? a. the name of each investor b. industry background c. potential disadvantages of the venture d. a list of suppliers

b. industry background

In the entrepreneurial strategy matrix, the creation of something new and different is categorized as a(n) a. time lag b. innovation c. psychological commitment d. risk

b. innovation

69. __________ enables startups to prove objectively that they are learning how to grow a sustainable business. a. a sound business plan b. innovation accounting c. all of these are correct d. minimum viable product

b. innovation accounting

80. ____________, a quantitative approach that allows us to see whether our engine-tuning efforts are bearing fruits. a. Yahoo analytics b. Innovation Accounting c. Google analytics d. Online measurement tools

b. innovation accounting

A new venture's lack of strategic planning can be the result of a. lack of dominance b. lack of expertise c. lack of preference d. time sharing

b. lack of expertise

60. Competitive analysis, advertising plan, and pricing policy are all part of the _________ segment. a. research, design, and development b. marketing c. financial plan d. milestone schedule

b. marketing

46. The key to marketing analysis is a. secondary data b. marketing research c. marketing response data d. psychographic information

b. marketing research

26. Which of the following is something an entrepreneur should not do when preparing for the oral presentation of a business plan? a. develop an outline of the plan b. memorize the presentation c. practice the presentation d. organize the presentation

b. memorize the presentation

73. On an average each person who signs up will bring, on an average _________ than one other person with him or her. a. no one b. more c. less

b. more

28. The best way to influence the boss and get what you want is to take the ___________ possible. a. safest route b. most extreme position c. quickest d. most cautious

b. most extreme position

57. A trademark is a distinctive _________ that is identified with a company's product. a. billboard b. name c. TV ad d. storefront sign

b. name

5. An indicator of the planning pitfall of "failure to anticipate roadblocks" is a. ignoring opinions of investors b. not recognizing future problems c. lacking action steps d. pursuing a good workforce

b. not recognizing future problems

When considering management, the entrepreneur should be concerned about a. employee benefits b. ownership positions c. the total number of employees d. pension and profit sharing

b. ownership positions

Which of the following hidden costs are involved when establishing the value of a firm? a. divergent expenses b. personal expenses c. insufficient controls and costs d. travel expenses

b. personal expenses

68. After the startup has made all the micro changes and product optimizations it can to move its baseline toward the ideal; the company reaches a decision point. At this point they ____________. a. use their learning to attract additional resources b. pivot or persevere c. revise their business plan d. decide whether or not to sell the organization

b. pivot or persevere

The discounted earnings method of valuation establishes a. an appropriate rate for replacement b. potential earning power c. future profits d. expectancy of the business expenses

b. potential earnings power

3. A critical point to be included in the business description is a. the business cycle b. potential market advantages c. sales projections d. key personnel

b. potential market advantages

56. Financial information is important to entrepreneurs because it a. takes away the assumptions concerning business operations b. pulls together all the information presented in other segments of the business c. answers all questions about the business and the entrepreneur d. doesn't follow any clear process about the financial operations

b. pulls together all the information presented in other segments of the business

Which of the following management principles emanated from Steve Jobs? a. sell products, not dreams b. put a dent in the universe c. say yes to 1,000 things d. strive to reach practical milestones

b. put a dent in the universe

9. The comprehensive business plan should be the result of a. investors' promises of capital b. reflections on the direction of the venture c. the entrepreneur's best guesses d. continuous operations of the venture

b. reflections on the direction of the venture

43. The textbook discusses all of the following aspects that distinguish social media marketing from traditional marketing except a. control versus contributions b. relevancy c. two-way communication d. trust building

b. relevancy

46. When using the graphic approach to break-even analysis, the entrepreneur must plot total _____________ and total ____________. a. expenses; revenue b. revenue; costs c. costs; income d. income; expenses

b. revenue; costs

65. When using the graphic approach to break-even analysis, the entrepreneur must plot total ___________ and total __________. a. expenses; revenue b. revenue; costs c. income; expenses d. costs; income

b. revenue; costs

35. When selling a business, which of the following is not good advice? a. sell when the timing is right b. sell when profits are low c. sell when sales are peaking d. sell when inventory is high

b. sell when profits are low

56. Which of the following helps an entrepreneur avoid the pitfall of not having realistic goals? a. developing employee zeal b. setting up a timetable of specific steps c. identifying a niche market d. following up on a professional appointments

b. setting up a timetable of specific steps

8. A candy bar that is purchased at the checkout lane is an example of a _________ good. a. generic b. shopping c. convenience d. specialty

b. shopping

74. The investment should be __________ when the symptom is minor and ________ when the symptom is more painful. a. larger and smaller b. smaller and larger c. the same for both

b. smaller and larger

32. To measure the success of your ad campaign, it's easiest to do this when you divide your marketing derived traffic into ______________. Select one: a. All of these are correct b. subgroups c. different age groups d. different geographic regions

b. subgroups

37. Market segmentation is a. heavily psychographic in nature b. the process of identifying a specific set of characteristics that differentiate one group of consumers from the rest. c. the process of segmenting the sales force d. the process of categorizing products into different segments

b. the process of identifying a specific set of characteristics that differentiate one group of consumers from the rest

49. A financial source that reads a business plan derives which of the following beneficial information? a. favorable lease terms b. the venture's ability to service debt or provide an adequate return on equity c. opinions about proposed business regulations d. probability of future employment with the business

b. the venture's ability to service debt or provide an adequate return on equity

49. Which of the following is not a common characteristic of financial statements? a. they are accurate b. they are complex c. they are holistic d. they are realistic

b. they are complex

67. The MVP's ultimate goal is to __________. a. cut the cost of developing the product b. to test fundamental business hypothesis c. find the greatest number of users d. achieve the vision of management

b. to test fundamental business hypothesis

38. The ____________ hypothesis tests whether a product of service really delivers value to customers once they are using it. a. growth b. value

b. value

Which of the following does a post-money valuation include that a pre-money valuation does not? a. market value b. venture capital investment c. excess earnings d. replacement value

b. venture capital invesetment

30. Startups have a true north, a destination in mind: creating a thriving and world-changing business. Ries calls this the startup's __________. a. measurement plan b. vision c. strategic plan d. marketing plan

b. vision

67. The lesson of the minimum viable product is that any additional work beyond what was required to start learning is ___________, no matter how important it might have seemed at the time. a. efficient b. waste c. valuable d. cost effective

b. waste

The price/earnings ratio is a method of valuation that is mostly used a. for small corporations b. with publicly held corporations c. for sensitive market conditions d. when competition is high

b. with publicly held corporations

77. It is often easier to raise money or acquire other resources when you have __________ revenue. a. growing b. zero c. negative d. large

b. zero

25. One of the most recent legal challenges to management succession came from the ______ case. a. Johnson Brothers b. Anderson Manufacturing Corporation c. Oakland Scavenger Company d. Willy & Willy Inc.

c. Oakland Scavenger Company

52. Who was the author of the book "Man's Search for Himself" that Michael Gerber read three times? Select one: a. Shakespeare b. Edgar Allen Poe c. Rollo May d. Edward Norton

c. Rollo May

63. Which of the following steps should be carried out third when deciding to sell a business? Select one: a. Finalize the prospective buyers. b. Publicize the offer to sell. c. Value the business. d. Time the sale appropriately.

c. Value the business.

54. In the simple linear regression analysis equation, Y = a +bx, which of the following variables represents expected sales? a. x b. a c. Y d. b

c. Y

56. Successful startups usually focus on ____________engine(s) of growth, specializing in everything that is required to make it work. a. lower profits b. new ideas c. a crisis d. new competition

c. a crisis

57. If you reach the limits for new customer growth (they are exhausted) and the growth suddenly slows, it provokes _____________. a. lower profits b. new ideas c. a crisis d. new competition

c. a crisis

43. One advantage of the delayed entry strategy for the younger generation succeeding the older generation of a family business is that a. strong relationships are readily established b. normal mistakes are viewed as incompetence c. a successor's skills are judged with greater objectivity d. knowledge of the environment is limited

c. a successor's skills are judged with greater objectivity

28. The only real challenge is to ___________ to the new landscape of mobile interaction so you can truly harness the potential of mobile marketing. a. adjust your outlook b. all of these are correct c. adapt your strategy and metrics d. eliminate the need to measure and change

c. adapt your strategy and metrics

46. __________ begins at the point in the life of your business when you decide to get some help? a. maturity b. infancy c. adolescence d. master stage

c. adolescence

E-Myth Revisited Quiz 1. Every _________ business reaches a point where it pushes beyond its owner's comfort zone? a. starting b. service c. adolescent d. small

c. adolescent

Unique managerial concerns of growing ventures encompass all of the following except a. the one-man-band syndrome b. community pressures c. agency problems d. time-management issues

c. agency problems

Unique managerial concerns of growing ventures encompass all of the following except a. the one-man-band syndrome b. time-management issues c. agency problems d. community pressures

c. agency problems

30. All the following EXCEPT ____________ helps you set goals for your website. a. tie the purpose to the business goals b. make it specific c. all of these are correct d. conduct competitor research

c. all of these are correct

59. Which of the following parts of the marketing plan emphasizes the factors that contribute to a firm's competitive edge? a. development of marketing strategies b. setting of pricing structures c. appraisal of marketing strengths and weaknesses d. conducting marketing research

c. appraisal of marketing strengths and weaknesses

62. When experiments produce a negative result, they ___________. a. reflect poorly on management b. all of these are correct c. are instructive and can influence the organization's strategy d. are a total waste of organizational resources and should not be repeated

c. are instructive and can influence the organization's strategy

25. Which of the following is a psychological characteristic of consumers? a. social class b. family influence c. aspiration d. income

c. aspiration

6. _________ is actually defined as the number of visitors that only visit one page of your website and then leave it. a. conversion rate b. number of visitors (Ways to measure the success of a website) c. bounce d. click through rate

c. bounce

52. A series of short paragraphs, each of which identified a particular feature that is protected by the patent, is known as a a. value b. plan c. claim d. journal

c. claim

65. The part of a patent application that defines and limits the patented invention is known as the a. specification b. concept c. claim d. illustration

c. claim

38. Which of the following should be done to avoid the pitfall of "no market niche" (segment)? a. analyze the expected needs of the new business b. conduct a market analysis c. clearly target a niche d. create a market niche

c. clearly target a niche

The adjusted tangible book value includes all of the following except a. goodwill b. deferred financing costs c. common price d. patents

c. common price

66. Which of the following is a marketing philosophy that focuses on research? Select one: a. computer-driven philosophy b. cost-driven philosophy c. consumer-driven philosophy d. sales-driven philosophy

c. consumer-driven philosophy

38. Even if your site is beautifully designed, it's no more than an empty frame without good _______. Select one: a. All of these are correct. b. Good Marketing Plan c. content d. marketing

c. content

65. Which of the following survey methods typically has the lowest respondent cooperation? Select one: a. phone surveys b. personal interviews, mall intercept c. mail surveys d. personal interviews, door to door

c. mail surveys

2. Marketers don't hear this often, but in the changing landscape of fluid mobile interaction, you have to be OK with ___________. a. all of these are correct b. Google analytics c. making certain assumptions d. uncertainty

c. making certain assumptions

Which of the following methods of valuation was developed by the U.S. Treasury to determine a firm's intangible assets? a. excess earnings b. replacement value c. market value d. multiple of earnings

c. market value

5. It goes without saying that ___________ is one of the biggest and most important expenditures that any company will make. a. strategic planning b. websites c. marketing d. staffing

c. marketing

67. A manufacturing firm needs to establish which of the following budgets? Select one: a. accounting budget b. profit budget c. material purchases budget d. cost budget

c. material purchases budget

62. A business plan Select one: a. provides a foolproof "blueprint" for a small business. b. forces the venture capitalist to prepare an effective strategy to use in case of trouble. c. may help an entrepreneur avoid a project that is "doomed" from the start. d. is a loan application.

c. may help an entrepreneur avoid a project that is "doomed" from the start.

49. A typical example of a forcing event is a(n) a. IRS audit b. slow business year c. mental breakdown d. natural disaster

c. mental breakdown

58. If the performance of the mentor and mentee are linked, it will ensure that the ____________ take education seriously. a. Both of these are correct b. mentees c. mentors

c. mentors

13. Which of the following works on the premise that a dollar today is worth more than a dollar in the future? a. internal rate of return b. net profit margin c. net present value d. payback period

c. net present value

3. A budget that is a statement of estimated income and expenses over a specified period of time is referred to as a(n) __________ budget. a. entrepreneurial b. cash-flow c. operating d. anticipated

c. operating

4. One type of budget used by the entrepreneur is a(n) ___________ budget. a. project b. cost c. operating d. R&D

c. operating

62. The last step in preparing the operating budget is to estimate Select one: a. current sales. b. variable costs. c. operating expenses. d. R&D costs.

c. operating expenses.

20. The more money, time, and creative energy that has been sunk into an idea, the harder it is to _________. a. find additional resources b. persevere c. pivot d. all of these are correct

c. pivot

26. The idea of "selling out" should be viewed in a _________ sense. a. last resort b. destructive c. positive d. negative

c. positive

Chapter 12 Quiz 1. The day before the presentation, the entrepreneur should a. arrange to have breakfast and coffee catered in b. have snacks delivered to attendees c. practice the complete presentation by moving through each slide d. read the paper to relieve nervousness

c. practice the complete presentation by moving through each slide

29. The first step in constructing an operating budget is a. estimating fixed costs b. a cost preparation c. preparation of the sales forecast d. a cash-flow estimate

c. preparation of the sales forecast

29. Which of the following is not an example of pressures or interests from within a firm that affect succession issues? a. employee wanting a percentage of the business in the owner's will b. rivalry among various branches of the family c. pressure from a family member to start his or her own business d. pressure on the owner/manager to designate an heir

c. pressure from a family member to start his or her own business

45. Customizable links to which of the 4Ps of marketing? a. product b. promotion c. price d. place

c. price

26. Marc Andreessen coined the term ___________ to describe the moment when a startup finally finds a widespread set of customers that resonate with its product. a. advertising nervona b. market potential achieved c. product/market fit d. All of these are correct.

c. product/market fit

70. In the initial public offering (IPO) process, which of the following discloses all of the company's pertinent information and presents a fair representation of the firm's true prospects? Select one: a. underwriting arrangement b. proposal c. prospectus d. audits

c. prospectus

15. The net present value method is a capital budgeting technique that helps to minimize some of the shortcomings of the payback method by a. recognizing the payback dollars over again b. discounting all future projects c. recognizing future cash flows beyond the payback period d. recognizing past cash flows of projects

c. recognizing future cash flows beyond the payback period

The entrepreneurial strategy matrix measures __________ and _____________. a. risk; security b. commitment; time c. risk; innovation d. opportunity; time

c. risk; innovation

11. Segregating the assets is the _______ step in selling a business. a. fifth b. eighth c. second d. sixth

c. second

4. One of the very first steps that you should take is to ________ regarding your website. a. appoint a conservative supporter of online marketing b. create similar goals to normal bricks and mortar operations c. set different goals d. determine a marketing budget

c. set different goals

5. ________ is the oldest excuse in the book for a failure of execution. a. High competition b. Lack of funds c. Lack of personnel d. Learning

d. Learning

33. Major trends in the venture capital field today include all of the following except a. less specialized and more homogeneous funds. b. a decrease in start-up investment amounts. c. global reach d. emerging feeder funds

a. less specialized and more homogeneous funds

70. Which of the following statements is not true of venture capitalists? a. they are interested in managing firms themselves b. they take a long time to raise venture capital c. they want the entrepreneur and the management to run the company d. they expect a high return on investments

a. they are interested in managing firms themselves

10. SEC stands for the a. Source of Equity company b. Securities and Exchange Commission c. Stock Exchange Corporation d. Standard Equity Commission

b. Securities and Exchange Commission

75. What of the following is one of the most important questions for entrepreneurs to ask regarding venture capitalists? a. Are they good at financial computation? b. What is it like to work with their firm? c. Are they good communicators? d. Are they wealthy?

b. What is it like to work with their firm?

39. Which of the following was a significant contributor to job growth, with the creation of 263,950 new jobs in the United States in 2016? a. crowdfunding b. angel investments c. factoring d. venture capital

b. angel investments

5. Anyone who violates an author's exclusive rights under a copyright is liable for a. actual damages only b. a prison term c. actual damages plus any profits from use d. any profits from use but not damages

c. actual damages plus any profits from use

24. Which of the following is not a stage of the evaluation process? a. evaluation of the business plan b. final evaluation c. beta-testing d. initial screening

c. beta-testing

47. Which of the following is a type of equity financing? a. convertible debentures b. loan with warrants c. common stock d. loan without warrants

c. common stock

7. The two parts of a patent application are specification and claims. True False

True

17. Innovation has become more global and is no longer the exclusive domain of Silicon Valley and Route 128 in Boston. True. False.

True

19. P2P lenders charge fees for brokering and servicing loans and collect penalties for late payments. True False

True

19. Works created and copyrighted after January 1, 1978, are protected for the life of the author plus 70 years. True False

True

20. The Bankruptcy Act was set up in order to provide assistance to both debtors and creditors. True False

True

64. When using P2P lending, one potential danger may be an uncertain regulatory environment. True False

True

67. Crowdfunding provides entrepreneurs with access to beta-testing and market feedback. True False

True

42. Evaluation of new-venture proposals includes all of the following processes except a. oral presentation b. product prototype c. initial screening d. evaluation of the business plan.

b. product prototype

50. Which of the following is not typically identified as a bootstrapping technique? a. trading equity for services b. encouraging customers to pay early c. hiring seasoned veterans d. sharing office space

c. hiring seasoned veterans