ENT 396- Ch 11, CH 10 HW, Ch. 09, ENT 396 CH. 8, ENT Test 3 Review

T/F Only major strategic decisions need to be supported through marketing research.

F

T/F Pricing procedures are the same for all types of ventures.

F

T/F Skimming is setting prices at such a low level that products are sold at a loss.

F

T/F Pricing in the social media age is sometimes based on a model that offers basic levels of service for free.

T

T/F Social media marketing is the application of online collaborative media for marketing purposes.

T

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

T

(T/F) Sources of debt financing include trade credit, accounts receivables, factoring, and finance companies.

True

When considering bankruptcy, entrepreneurs as sole proprietors normally prefer a. Chapter 13. b. Chapter 5. c. Chapter 7. d. Chapter 11

a

The traditional accounting equation that verifies the accuracy of the entrepreneur's balance sheet is a. assets = liabilities + owner's equity. b. assets + liabilities = owner's equity. c. assets = liabilities - owner's equity. d. assets + owner's equity = liabilities

assets = liabilities + owner's equity.

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

b

From where does an S corporation take its name? a. Uniform Commercial Code b. Subchapter S of the Internal Revenue Code c. state law d. S Lab

b

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

b

The 4Cs of marketing include all the following except: a. choice b. communities c. continuity d. cocreation

c. continuity From Product........to Cocreated From Promotion.....to Communities From Price............to Customizable From Place............to Choice

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

in-person interviews

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

including questions only pertaining to the study.

Financial information is important to entrepreneurs because it pulls together all the information presented in other segments of the business and: a. it quantifies all the assumptions concerning business operations. b. it answers all questions about the business and the entrepreneur. c. it justifies long term commitment to the business. d. it predicts the competitive environment in which the business operates.

it quantifies all the assumptions concerning business operations

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

liquidity.

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

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

Of the following, which does the textbook identify as critical to the marketing planning process? a. marketing myopia b. market niche c. marketing research d. market segmentation

marketing research

The principle objective of capital budgeting is to a. maximize the assets of the firm. b. optimize the number of project requests. c. minimize the risks of the firm. d. maximize the value of the firm.

maximize the value of the firm

Contribution margin is the difference between a. purchase price and fixed cost per unit. b. selling price and variable cost per unit. c. purchase price and variable cost per unit. d. selling price and fixed cost per unit.

selling price and variable cost per unit.

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

setting price to maximize profit

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

Ratio analysis

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

T

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

T

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

T

T/F In the marketing shift from the 4Ps to the 4Cs, price shifts to choice and promotion shifts to communities.

T

T/F Marketing information that has already been compiled is known as secondary data.

T

T/F Marketing research involves the gathering of information about a particular market, followed by analysis of the information.

T

T/F Mobile social media applications can be differentiated based on location-sensitivity as well as on time-sensitivity.

T

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

T

Market Segmentation

The process of identifying a specific set of characteristics that differentiate one group of consumers from the rest. 1. Demographic variables = Age, marital status, sex, occupation, income, and location 2. Benefit variables = Convenience, cost, style, trends (depending on the nature of the particular new venture)

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

They are interested in trying to manage firms themselves.

(T/F) Private placement is a method of raising capital through the private placement of securities.

True

(T/F) Sophisticated investors are wealthy individuals who invest more or less regularly in new and/or early- and late-stage ventures.

True

(T/F) Use of debt to finance a new venture involves a payback of funds plus an interest fee for the use of the money.

True

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

a

An informal risk capitalist is referred to as: a. a business angel. b. your neighbor. c. someone with extra money to invest but who is not interested becoming an entrepreneur. d. a retiree.

a business angel.

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

b

Laws governing intellectual property rights include copyrights, trademarks, and leases. a. True b. False

b

The cash flow budget describes a. cash outflows/accounts receivables. b. interest income/interest expense. c. profits/costs. d. cash inflows/cash outflows.

cash inflows/cash outflows.

Which of the following terms is not synonymous with social lending? a. peer-to-peer (P2P) lending b. commercially viable lending c. crowdfunding d. banking 2.0

commercially viable lending

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

common stock

The textbook recommends that social media marketers consider three aspects of social media when using social media tools for marketing purposes. What are they? a. resource management, context, and content b. cost, complexity, and relevancy c. control, contribution, and distribution d. creating something of value, enabling customer promotion, and encouraging participation

creating something of value, enabling customer promotion, and encouraging participation

Specific forms of partnership include which of the following? a. limited partnerships b. S partnerships and limited liability companies c. limited partnerships and S partnerships d. limited partnerships and limited liability partnerships

d

fixed cost a. changes in response to changes in activity for a given period of time. b. does not change in response to changes in activity for a given period of time. c. changes inversely to changes in activity for a given period of time. d. does not do any of these.

does not change in response to changes in activity for a given period of time.

Secondary data consists of a. existing information. b. newly developed primary research. c. internal data only. d. external data only.

existing information.

Break-even analysis is a technique commonly used to assess the a. expected product profitability. b. rate of return on investment. c. net present value. d. total costs.

expected product profitability.

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

how many projects, in total, should be selected.

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

less specialized and more homogenous funds

A budget that is a statement of estimated income and expenses over a specified period of time is referred to as an a. entrepreneurial budget. b. anticipated budget. c. expected results budget. d. operating budget.

operating budget

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

private placement

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

regular interest payments.

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

regular interest payments.

What is penetration pricing? a. setting price to match the competition b. setting price to switch customers to new product lines c. setting price to maximize market share d. setting price to maximize profit

setting price to maximize market share

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

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

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. assets minus (liabilities plus owner's equity). b. assets minus liabilities. c. assets minus owner's equity. d. zero.

zero

Pricing strategies

Factors affecting the pricing decision: The degree of competitive pressure The availability of sufficient supply Seasonal or cyclical changes in demand Distribution costs The product's life-cycle stage Changes in production costs Prevailing economic conditions Customer services provided by the seller The amount of promotion The market's buying power

(T/F) Because the advantages of going public outweigh the disadvantages, it is in a corporation's best interest to go public.

False

(T/F) Equity financing is money invested in the venture with legal obligations to repay the principal amount of interest or interest rate on it.

False

(T/F) Regulation D augments the regulations for reports and statements required for selling stock to private parties, friends, employees, customers, relatives, local professionals.

False

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

What is it like to work with their firm?

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

a

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

a

All of the following are ways of invalidating a trademark except a. clearing-out proceedings. b. abandonment. c. cleaning-out proceedings. d. generic meaning.

a

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

a

One of the principal advantages of a corporate form of ownership is that liability (the most money a person can lose) is limited to an individual's investment. a. True b. False

a

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

a

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

a

Three primary legal forms of organization are the sole proprietorship, the partnership, and the corporation. a. True b. False

a

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

a

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

a dollar today is worth more than a dollar in the future.

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

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

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

amateur angels

The entrepreneur should ask the venture capitalist _____ questions. a. exactly twenty b. an unlimited number of c. no d. at most ten

an unlimited number of

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

analysis of financial records

Which of the following are not trademarks? a. mottos b. generic words c. symbols d. names

b

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

b

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

b

The 4Ps of marketing include all the following except: a. promotion b. principle c. price d. product

b. principle

Which of the following is a form of the pro forma statement? a. cash flow statement b. balance sheet c. costs of goods sold d. budget

balance sheet

All of the following are recognized as advantages of partnerships except: a. direct rewards b. possible tax advantages c. lack of continuity d. ease of formation

c

That part of a patent application which identifies the features that are protected is known as the a. particular. b. essence. c. claim. d. identification.

c

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

c

The registration of a trademark has a lifetime of a. 25 years. b. the lifetime of the owner. c. 10 years plus 10-year renewable periods. d. 20 years plus 5-year renewable periods.

c

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

c

A variable cost a. changes in the same direction and in direct proportion to changes in operation activity. b. is synonymous with labor costs c. changes in the same direction and in inverse proportion to changes in operating activity. d. changes in the opposite direction and in direct proportion to changes in operating activity.

changes in the same direction and in direct proportion to changes in operation activity.

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

commercial banks.

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

distribution

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

that pricing needs to be adjusted at each stage in a product's life cycle

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

the growth stage model

A key concept in developing an expense budget is that of a. labor costs. b. fixed costs. c. taxes. d. rent.

Fixed costs

Which is an important question for the entrepreneur to ask when evaluating the venture capitalist? a. Is the person a close relative? b. Is the person wealthy? c. Is the person someone with whom the entrepreneur can work? d. Is the person a college graduate?

Is the person someone with whom the entrepreneur can work?

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

F

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

F

T/F It is usually more expensive to gather secondary data than primary data.

F

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

F

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

F

The traditional accounting equation is: assets + liabilities = owner's equity. a. True b. False

F

(T/F) Venture capitalists, surprisingly, require little information before they make an investment.

False