Chapter -6

In which part of a business plan should the expected revenues be included? A. financial data B. company background C. Definition of the market D. management structure

A. financial data

A software engineer is part of a company's____resources. A. human B. physical C. financial D. intangible

A. human

Through equity financing, a company can be partly owned by : A. the investors B. commercial banks C. micro loan companies D. lenders

A. investors

_____ provide employees with standing instructions for performing their jobs, comprise detailed explanations of how to do the work properly, and inform in what order it should be done. A. method and procedures B. policies C, budgets D. mission statements

A. methods and procedures

_____ provides comprehensive long-term direction to help a business a accomplish its mission. A. strategic planning B. Operational planning C. Elemental cost planning D. Enterprise resource planning

A. strategic planning

Raw materials used to produce products are : A. variable expenses B. overhead expense C. fixed expense D. promotional expense

A. variable expenses

Financial planning involves: A. estimating income and expenses B. choosing a product to sell C. selecting the type of business to enter D. deciding the kind of franchise to buy

A. estimating income and expenses

An effective business plan should be about_____. A. 25 to 30 pages long or less B. 40 to 50 pages long C. 50 to 65 pages long D. 70 to 75 pages long or more

A. 25 to 30 pages long or less

____ should be the first management function performed by an effective business owner-manager. A. Planning B. Organizing C. Staffing D. Controlling

A. Planning

_____ are general statements that serve as a guide to managerial decision making ands supervisory activities. A. methods B. policies C. budgets D. procedures

B. policies

Matt plans to open a convenience store. The startup cost is approximately $10,000. Since Matt has only $2,500 with him, he decides to invite two of his friends—Brett and Brian—to join him in this venture. In this scenario, who should be in charge of writing the business plan? A. only Brett and Brian, since they are contributing 75% of the initial investment B. Matt, Brett, and Brian, since it is always a team effort C. whoever has paid the biggest share of the startup cost D. Matt alone, since it was primarily his business plan

B. Matt, Brett, and Brian, since it is always a team effort

Which of the following is part of a company's financial resources? A. tools and equipment B. available equity C. reputation D. supervisors

B. available equity

_____ is the amount of money available at a given time to pay expenses. A. equity B. cash flow C. line of credit D. fixed capital

B. cash flow

The _____ is a part of a business plan that outlines the entire plan, its major objectives, and the expected results. A. cover sheet B. executive summary C. table of content D. appendix

B. executive summary

Expenses that do not alter in value as sales volume rise or fall are called____. A. overhead expenses B. fixed expenses C. operating expenses D. miscellaneous expense

B. fixed expense

____ give a short-term direction to a business and serve as benchmarks for measuring performance. A. budgets B. Objectives C. Strategies D. Missions

B. objective

The process of setting objectives and devising courses of action to achieve those objectives id termed_____. A. controlling B. planning C. organizing D. leading

B. planning

Which of the following is an example of operational planning in a company? A. formulating the mission statement B. Setting the personnel policy C. selecting the type of business to enter D. Determining the financial needs

B. setting the personnel policy

A business plan can be successfully prepared by: A.adding overestimated values of expected revenues to attract investors. B. establishing a long-term operational plan only for the current production process. C. developing short-term detailed plans for those involved with the business. D. removing the parts related to operational planning and retaining the parts related to strategic planning.

C. developing short-term detailed plans for those involved with the business

Many consultants and advisers push small companies to give more emphasis to their: A. internal environment B. strengths C. external environment D. competitive edge

C. external environment

In order to maintain control, the owner of a business should: A. convince securities dealers to finance the startup costs B. use venture capital funds C. invest more personal funds than all other sources combined D. borrow funds for the startup capital from external lenders

C. invest more personal funds than all other sources combined

The largest expenses for companies selling products usually is related to: A. human capital and resources B. insurance C. materials, suppliers, and/or goods D. advertising

C. materials, suppliers, and/or goods

Strategic planning helps a business set its____. A. method and procedures B. policies and visions C. missions D. budgets

C. missions

The external environment of a SWOT analysis consists of : A. strengths and weaknesses B. threats and weaknesses C. opportunities and threats D. opportunities and strengths

C. opportunities and threats

___ set the requirements needed to follow strategies and accomplish objectives. A. methods B. policies C. procedures D. budgets

D. budgets

_____ is the process of setting standards, measuring performance against standards, and taking corrective action to see that planned performance is achieved. A. planning B. organizing C. staffing D.controlling

D. controlling

A SWOT analysis is used to : A. select human resources B. restrict over-usage of physical capital C. formulate the mission of a company D. identify new markets

D. identify new market

Which of the following statements is true of a company's business plan? A. it emphasizes operational planning more than strategic planning B. it is a money-raising tool to attract venture capitalists when the owner wants assume more control over the company C. it usually provides big entrepreneurs a greater chance of success than the small business owners D. it provides a detailed design of activities to be carried to finance the business and market products

D. it provides a detailed design of activities to be carried to finance the business and market products

A business's____ defines the present business scope and broadly describes an organization's present capabilities, focus, and activities A. budget B. policy C. Operational plan D. mission statement

D. mission statement

The oral presentation of any business plan should be: A. given by an outside advisor. B. delivered from the owner's perspective. C. detailed in order to motivate employees. D. validated by the market research findings

D. validated by the market research findings