MGT 253
During the period when the previous owner of an existing business is transitioning ownership to the new owner, a number of tasks should be completed. Which of the following statements is correct about these tasks? A. If there are too many employees, enact a layoff plan immediately. B. Wait at least six months before informing customers and suppliers of the sale of the business. C. Ensure the former owner comes to the business every day for at least 30 days following the sale. D. Make all significant changes slowly over a long period of time.
A
In the Friend's Home Health case study, the buyout offer was: A. $400,000 B. $500,000 C. none of these D. $600,000
A
In the Friend's Home Health case study, the founders: A. had to figure out how much their company was worth B. did not have a need to know how much their company was worth C. knew how much their company was worth D. none of these
A
In the Tealuxe case study, the founder: A. had significant interest in actively managing the storefronts B. none of these C. had no interest in actively managing the operational side of the business D. had significant interest in actively managing the operational side of the business
C
John needs to know who his customers are and how to attract them. He needs a(n): A. operation plan B. business plan C. marketing plan D. advertising plan
C
Marketing efforts need to be clearly identified and defined based on: A. the ability to effectively promote the company B. the potential competitors in the market C. the business's mission D. none of these
C
Once a small business owner defines the geographic area, the next step is to define the _________ segment of the market that the business is seeking to serve. A. advertising B. marketing C. particular D. multimarket
C
Promotion of a product or service is considered as: A. planning B. operations C. marketing D. management
C
The Civil Rights Act applies to all firms having how many employees? A. more than 16 employees B. less than 16 employees C. more than 25 employees D. less than 15 employees
C
When a company starts to decline, the first step is to _________. A. seek more investors B. stabilize C. retrench D. file bankruptcy
C
When you buy a franchise, you are buying: A. an established name B. a single store or the right to have multiple units C. all of these D. the opportunity to operate under that name for a period of time
C
Which of the following is an example of the initial payments that a new small business has to make? A. initial advertising expenses B. security deposits C. all of these D. bank set-up fees
C
A major difficulty of operating a mail order catalogue is the handling of: A. search for call center employees B. wrong addresses C. primary data D. credit cards
D
A potential franchisee has to be _________ before the owner will be sent a complete Uniform Franchise Offering Circular. A. researched B. interviewed C. bonded D. vetted
D
An employee cannot sue a small business owner for injury, if the individual accepts _________. A. social security B. employment compensation C. unemployment compensation D. workers' compensation
D
An owner who does not set _________ and _________ risks the possibility of losing funds and valuable resources. A. timetables; objectives B. goals; responsibilities C. goals; objectives D. timetables; responsibilities
D
Franchisors make decisions based on what is best for: A. franchisors B. none of these C. franchisees D. the total business
D
In a family business, business decisions: A. are made by negotiations between family and nonfamily members. B. are never family decisions C. are seldom rational decisions D. often affect both the business and the family
D
In a family business, the interests of the family and the interests of the business are best described as: A. having no relationship with each other B. conflicting C. coinciding D. overlapping
D
Your ability to obtain critical supplies may dictate your _________ time and _________ time. A. none of these B. lead; opening C. supply; lead D. order; supply
B
In the case study James Monsees and Adam Bowen: Ploom, one of the marketing problems the founders have is: A. the ability to market the problem internationally B. none of these C. the ability to make claims about the health benefits D. the ability to develop promotion
C
A production chart is similar to a: A. critical path chart B. deficit gap chart C. pro forma chart D. analysis chart
A
A small business owner providing a service should recognize that pricing is a valuable tool to __________ customer flow. A. Balance B. Maximize C. Quicker D. Slow
A
A(n) _________ demonstrates how a set of activities are dependent on each other and which activities take the longest time. A. critical path chart B. pro forma chart C. production pie chart D. activity-setting chart
A
According to the book, which of the following is a good characteristic of an advertisement used to recruit job applicants? A. all of these B. information about the culture of the firm C. expression of excitement about the business D. expression of desire to have the right person to join the organization
A
Chapter 11 bankruptcy provides a fast-track option. Which of the following statements is NOT correct about this fast-track option? A. The fast-track plan must show that unsecured creditors will be paid first before other creditors. B. The fast-track plan provides creditors with far less control than in a larger organization's bankruptcy filing. C. The fast-track plan must show how creditors who have pledged collateral behind them will be brought current. D. The fast-track plan must show how back taxes will be paid within five years.
A
Chapter 12 and Chapter 13 bankruptcies are used by what kinds of businesses that cannot be turned around? A. sole proprietors and family-owned businesses B. S and C corporations C. partnerships and limited liability partnerships D. limited liability corporations
A
It is relatively common for new equipment to depreciate in the first year after purchase. What is the typical rate of depreciation of new equipment in the first year? A. more than 50 percent B. more than 10 percent C. less than 40 percent D. less than 50 percent
A
Items covered in the Uniform Franchise Offering Circular include all of the following EXCEPT: A. marketing goals B. bankruptcy C. investment requirements D. litigation
A
Marketing efforts need to be based on the: A. mission statement B. focused strategies C. aligned marking strategies D. core values
A
The critical chart process for an Internet-based business is _________ for a manufacturing business. A. somewhat simpler than B. more complex than C. the same as that D. none of these
A
What does a new business owner need to keep in mind while making a decision about what equipment to buy? A. All of these. B. What equipment is needed? C. What is the cost of the equipment? D. How quickly the company may require larger/more equipment?
A
When entering a new industry through the purchase of a franchise, a small business owner should: A. all of these B. examine the industry C. examine position relative to other new franchises D. examine potential customers
A
Which of the following application and interview questions is legal to ask? A. What previous experience do you have? B. Are you a Republican or a Democrat? C. Are you heterosexual or homosexual? D. Where were you born?
A
Which of the following correctly depicts the typical cycle of the economy? A. boom, slowdown, recession, growth, and boom B. boom, slowdown, recession, and growth C. growth, boom, slowdown, recession, and boom D. boom, growth, slowdown, recession, and boom
A
Which of the following factors should a new business owner consider when deciding the best time to start a new business? A. all of these B. competitors' moves C. the general environment D. lifestyle issues
A
Which of the following is the basic contract generated by a franchisor for all franchises? A. franchise agreement B. master license C. franchise consent contract D. franchisor agreement
A
Which of the following is typical when purchasing new equipment instead of used equipment? A. all of these B. guarantees that the new equipment is the most current available C. usually the most expensive option D. delivered directly to the new business
A
Which of the following statements is correct about the level of risk involved in purchasing an existing business? A. Buying an existing business is less risky than buying a franchise. B. There is no difference in the risk of buying a franchise compared to starting a business from nothing but an idea. C. Buying a franchise can dramatically decrease the risk of failure. D. Buying a franchise can dramatically increase the risk of failure.
A
Which of the following theories states that we all judge how we are treated relative to how we see others being treated? A. equity theory B. equality theory C. judgement theory D. expectancy theory
A
A business is an investment of both _________ and _________. A. time; labor B. work; time C. labor; money D. time; money
D
A franchisor makes money by: A. providing specific training B. collecting a percentage of sales C. selling the franchise D. all of these
D
A program that allows employees to contribute to their retirement on a tax-free basis is _________. A. 401(F) B. 401(T) C. 401(C) D. 401(k)
D
A small business determines the cost of providing a product or service, and then adds some level of profit determined to be appropriate. This is called: A. pricing ceiling B. add-on cost C. price leader D. cost-plus pricing method
D
According to the book, if a business owner's efforts to turn around the business fail, what is the best option? A. declare personal bankruptcy B. have a going out of business sale C. personally pay the debts of the business D. declare bankruptcy of the business
D
According to the book, which of the following firms needs to pay special attention to OSHA guidelines? A. family business forms B. none of these C. it firms D. manufacturing firms
D
In establishing pricing, there are several caveats that a small business person should consider. Which of the following represents such caveats? A. Do you want to offer a quantity discount? B. What is the actual price charged for a product or service? C. How to offer an even greater value for the money charged in order to build a customer base? D. All of these
D
In franchising, an entity or individual granted the right to conduct business according to specified methods and terms of another party is known as a: A. licensee B. franchiser C. franchise D. franchisee
D
In the Flow Right Brewery & Bar case study, Chris was offered a buyout from: A. a venture capitalist B. none of these C. his ex-wife D. his former boss
D
Promotion is the means by which businesses make their product or service known to potential customers. Which of the following is the most commonly used form of promotion? A. viewed on the Internet B. heard on the radio station C. seen in television D. all of these
D
The authors of our book advise the owners of a declining business to: A. identify all the problems and hire a consultant to develop a turnaround plan B. identify all the problems and focus first on the problem that will be the easiest to resolve C. none of these D. pick the one key reason the business is declining and focus on fixing it
D
Universal Studios, who made the Indiana Jones movies, forms a relationship with Burger King to put advertisements for the movie on drink cups. This is a form of _________. A. compact alliance B. none of these C. promotional alliance D. strategic alliance
D
Web pages can be used as a: A. distribution channel B. means of promotion C. none of these D. both of these
D
When a franchisee delivers inconsistent quality, it hurts the company and the _________. A. bankers B. business brokers C. licensers D. franchisees
D
Which legal form of business best protects an owner's personal assets when he or she must declare business bankruptcy? A. all of these B. sole proprietor C. partnership and limited liability partnership D. corporation and limited liability corporation
D
Which of the following information should be obtained in the application/interview process? A. Work History B. Education and Training C. Social Security Number D. All of These
D
Which of the following is a method to maximize the selling price? A. discounted future net cash flow B. asset-based valuation C. market estimation valuation D. all of these
D
Which of the following is not a part of the definition of franchising? A. one party allowing another to do business as it specifies to gain certain benefits B. one-party obtaining the rights to sell a specific product or service C. two-party legal agreement D. two parties brought together by a facilitator
D
Which of the following represents the impact of a poor employee on the functioning of a small business? A. The problems may bleed over to other employees. B. The owner's time is lost. C. The organization does not fully benefit from the employee. D. All of these
D
Which of the following rights is NOT a benefit of purchasing a franchise? A. right to use the franchisor's name B. right to operate a business within the guidelines of the agreement C. right to open a branch of the business in a given area D. all of these are benefits of purchasing a franchise.
D
Which type of business has a production process? A. Retail B. Manufacturing C. Technology D. All of these
D
The success of franchising is dependent on the hard work of the franchisee and the value of the _________. A. licensee B. franchisor C. leasee D. owner
B
When a small business owner is advertising a job, the company needs to attract the/a _________ pool of applicants to choose from. A. Smallest B. Largest C. Diverse D. Best Qualified
B
Which of the following aspects needs to be considered while developing a marketing plan? A. determining sales management procedures B. all of these C. specifying the ideal and general target customer D. indentifying your market
B
Which of the following have well-established methods of operation? A. new start-up firms B. franchises C. all of these D. bankrupt firms
B
A systematic review of employees will include: A. plans for future employee growth B. how they perform relative to their objectives C. all of these D. reset goals for the next year
C
The franchisor and franchisee relationship is governed by the: A. United Franchise Offering Contract B. United Franchise Offering Circular C. United Franchise Optimum Contract D. United Franchise Offering Clauses
B
The owners in the Friend's Home Health case study realized their plans for the operation were: A. breaking even B. not leading to a break-even point C. in line with production chart progress D. faced with a positive situation above their expectations
B
A business that is declining due to operations problems struggles with: A. not selling enough products or services B. both of these C. none of these D. not being efficient in producing the product
B
A small business founder needs to plan for the type of sale that will _________ their returns. A. minimize B. maximize C. increase D. decrease
B
Critical path analysis is a _________ document that should be modified during the process of actually accomplishing tasks. A. dynamic B. living C. stagnant D. both dynamic and living
B
Developing an accurate valuation helps: A. benchmark the growth of the firm by establishing a true starting point B. all of these C. convince outside equity investors of the potential long-term returns associated with the harvesting of the business D. provide insight for the founders as to the amount of capital and labor that should be invested in the effort
B
In an interview, an interviewer can ask questions about: A. Arrest Record B. Prior Convictions C. Religion D. Disability
B
In the Friend's Home Health case study, the founders were: A. caught off-guard when a rehabilitation center offered to buy them out B. caught off-guard when a hospital offered to buy them out C. none of these D. looking for an investor to buy them out
B
In the case study Friend's Home Health, the founders had issues with identifying potential customers because: A. they were targeting rehabilitation hospitals B. they were targeting elderly persons likely to be hospitalized C. they were targeting individuals who loved and cared for elderly people D. all of these
B
Maintaining an estimate of value of a business as it grows and develops is the responsibility of the: A. shareholder B. owners C. investors D. accounting firm
B
Performance review includes all of the following EXCEPT: A. review of an employee's goals B. future pay raises C. outcomes over a given period D. achievements for a given period
B
Pricing something that ends in 99 cents makes a big difference in the buying of a product. This is because of a consumer's: A. ethics B. perception C. pocketbook D. values
B
The Americans with Disabilities Act regulates firms with how many employees? A. less than 15 employees B. 15 or more employees C. less than 20 employees D. 20 or more employees
B
Which of the following statements about the risk involved in buying a franchise is correct? A. There is no difference in the risk of buying a franchise compared to starting a business from nothing but an idea. B. Buying a franchise can dramatically decrease the risk of failure. C. There is no difference in the risk of buying a franchise compared to buying an existing business. D. Buying a franchise can dramatically increase the risk of failure.
B
Which one of the following methods does NOT require an extensive understanding of geographic location? A. mixed promotion B. independent sales force C. pure promotion D. virtually free promotion
B
Why is it a risky choice to buy an existing business that has filed for bankruptcy? A. Customers may boycott the new owner due to their loyalty to the current owner. B. It takes special knowledge and skills to conduct an effective turnaround. C. Suppliers may offer extra discounts to the new owner to support the turnaround. D. The current owner may not want to sell the business.
B
_________ are events established around a particular theme where businesses are allowed to set up booths in order to promote their goods or services. A. Television shows B. Trade shows C. Marketing fairs D. Opportunity fairs
B
_________ has(have) been trouble to the mail order business; owners need to include the cost of this in the pricing of their products. A. Returns B. Fraud C. Printing D. Coding
B
A document called the _________ has been the accepted format for satisfying franchise requirements. A. Uniform Franchise Offering Agreement B. United Franchising Offering Circular C. Uniform Franchise Offering Circular D. United Franchise Circular Agreement
C
A job offer is finalized by _________. A. candidate reading the offer B. a handshake C. candidate signing the offer D. employer putting it in writing
C
According to the book, what is the most important thing that a business owner needs to define after the geographic area has been determined? A. all of these B. the business's mission statement C. the particular segment of the market that the business is seeking to serve D. the potential competitors in the market
C
According to the book, which of the following terms is used to discuss the acceptance by key stakeholders that your business is more than just a "start-up" and will be successful? A. efficacy B. efficiency C. legitimacy D. applicability
C
All of these are reasons why small business owners do not write job descriptions EXCEPT: A. remain flexible for the right individual B. unclear picture of the new position C. wait till the employee gets hired D. lack of time
C
An individual looking to buy a franchise should identify a franchisor that is the best potential match in: A. history B. support C. all of these D. expansion plans
C
Human resource management includes _________ the employees. A. inspiring B. hiring C. all of these D. managing
C
If a new business is to compete against McDonald's, it will have to have similar _________ and _________ of offerings. A. none of these B. type; quantity C. quality; quantity D. kind; quality
C
In a successful Chapter 11 bankruptcy, a business owner may be able to do all of the following EXCEPT: A. terminate union agreements B. terminate leases and other contracts C. sell the assets and keep the money for personal expenses D. force creditors to accept an equitable plan for reorganization
C
In the "Study Café" example, the critical chart process helped the students realize: A. both they need to open their doors for business as they originally planned and they need to open their doors for business in April B. they need to open their doors for business in April C. they need to open their doors for business in August D. they need to open their doors for business as they originally planned
C
In the Flow Right Brewery & Bar case study, Jack Chen wanted to leave his job and start his own business because: A. he believed the advice of longtime employees was being routinely ignored B. his prospects for rising any further in the organization were limited C. all of these D. he was concerned with the strategic direction that the firm was pursuing
C
Which of the following is the initial listing of a firm as a public entity on the public equities market? A. interactive price offering (IPO) B. internal public offering (IPO) C. initial public offering (IPO) D. internal price offering (IPO)
C
Which of the following questions should you try to answer after the target population has been identified? A. How many individuals from the target population actually exist within the business's market area? B. Do these numbers of people who might actually be your customers match with your cash flow projections? C. All of these D. What percentage of these individuals is reasonable for you to attract as customers?
C
Why is it so difficult to turn around a small business whose performance is declining? A. Economic issues, such as the interest rate charged on loans, make it difficult to get the loans needed to overcome problems. B. Government regulations on small businesses limit the ability to innovate. C. Small businesses have limited slack resources. D. None of these
C
_________ is the acceptance by key stakeholders that you are a genuine business that will still be in operation next year. A. Applicability B. Efficiency C. Legitimacy D. Generalizability
C
_________ is the quantity and quality of human effort directed toward producing goods and services. A. Human Power B. Human Knowledge C. Human Resource Management D. Human Skills
C