Exam 2 MGMT 340 340

On a projected income statement, a business owner's target income is ________. Select one: a. the income that will produce a 10 percent return on the owner's financial investment in the business b. the income that the owner could earn working for someone else c. the sum of a reasonable salary for the time spent running the business and a normal return on the amount invested in it d. the income at which the company's total revenues and its total expenses are equal

c. the sum of a reasonable salary for the time spent running the business and a normal return on the amount invested in it

The entrepreneurs who are proving to be the most successful in e-commerce are those who know how ________. Select one: a. to effectively finance their e-commerce effort b. technology works, inside and out c. their industries work, inside and out d. to turn a profit

c. their industries work, inside and out

An effective approach to successful collections includes ________. Select one: a. waiting to invoice and communicate with the customer once a payment problem clearly exists b. an abrupt, in-your-face style of communication once a payment is late c. timely, well-communicated payment expectations with well-documented records d. setting up an automated collection system to generate "Past Due" notices that does not require personal intervention

c. timely, well-communicated payment expectations with well-documented records

The second essential purpose for creating a business plan is ________. Select one: a. to guide the operation of the company by charting its future course and devising a strategy for following it b. to file with the SEC before a public stock offering c. to attract lenders and investors d. to attract potential managers and employees to run the new venture

c. to attract lenders and investors

The philosophy of producing a high-quality product or service and achieving quality in every aspect of the business and its relationship with the customer, with a focus on continuous improvement in the quality delivered to customers is ________. Select one: a. time compression management, or TCM b. bootstrap marketing c. total quality management, or TQM d. customer experience management, or CEM

c. total quality management, or TQM

Businesses selling less well-known brands should ________. Select one: a. reduce prices b. offer freebies c. use customer testimonials and endorsements d. All of these

c. use customer testimonials and endorsements

Some companies use ________ to encourage customers to participate in the design of their products, a process called ________. Select one: a. widgets; co-creation b. wikis; collaboration c. wikis; co-creation d. mashups; co-creation

c. wikis; co-creation

A checking account that never has idle funds (because it draws funds from an interest-bearing master account to cover checks written) is called a ________ account. Select one: a. money market b. sweep c. zero-balance d. deficit

c. zero-balance

A bank loan that imposes restrictions or covenants on the business decisions an entrepreneur makes concerning the company's operations is called a ________. Select one: a. floor planning b. line of credit c. term loan d. home equity loan

term loan

The ________ ratio is a measure of the small company's ability to pay current debts from current assets and is the liquidity ratio most commonly used as a measure of short-term solvency. Select one: a. quick b. debt-to-net worth c. debt-to-assets d. current

current

A good advice to follow in customer surveys is ________. Select one: a. All of the above b. "You've got them hooked, get all you can from them" c. "Be as detailed as possible" d. "Keep them short"

d. "Keep them short"

The average venture capital firm screens about ________ investment proposals each year and ultimately invests in ________ of them. Select one: a. 5,000; 80 b. 10,000; 12 c. 5,000; 13 d. 1,000; 1

d. 1,000; 1

An estimated ________ percent of adults participate in social networks and the highest level of participation is social media is among adults ________ 30 years of age. Select one: a. 55; under b. 55; over c. 65; over d. 73; under

d. 73; under

Ideally, a focus group should have ________ members. Select one: a. 2-3 b. 5-7 c. 16-20 d. 8-12

d. 8-12

A cash budget ________. Select one: a. is based on the cash method of accounting b. is a "cash map," showing the amount and the timing of cash flowing into and out of the business over a given period of time c. will never be completely accurate since it is based on forecasts d. All of these

d. All of these

A small company's mission statement ________. Select one: a. establishes its purpose in writing b. gives the business and everyone in it a sense of direction c. defines what the company is, why it exists, and its reason for being d. All of these

d. All of these

Before going global, entrepreneurs should ask themselves questions regarding ________. Select one: a. profit potential and commitment of resources for a global effort b. a viable exit strategy and the cost of not going global c. the reasons, rationale, and understanding cultural differences d. All of these

d. All of these

Business owners new to international business are sometimes shocked ________. Select one: a. by the wide range of labor costs they encounter b. that practices common in the United States (e.g., overtime, women workers, and employee benefits) are restricted, disfavored, or forbidden in other cultures c. that what appear to be "bargain" labor rates turn out to be excessively high after accounting for the quality of the labor force and the benefits their governments mandate d. All of these

d. All of these

How can a company achieve stellar customer service and satisfaction? Select one: a. Listen to customers and define superior service. b. Set standards and measure performance. c. Hire the right employees and treat them with respect. d. All of these

d. All of these

Many joint ventures fail because the parties involved neglected to ________. Select one: a. select a partner who shares their company's values b. spell out in writing exactly how the venture will work and who has decision-making authority c. select a partner whose skills are different from, but compatible with, their own d. All of these

d. All of these

Responsible online merchants should make sure shipping and handling charges are ________. Select one: a. reasonable b. displayed early in the buying process c. easy to find d. All of these

d. All of these

The Web is one of the most efficient ways of reaching both new and existing customers and when properly promoted, a Web site can ________. Select one: a. reduce a company's cost of generating sales leads b. be an affordable way to reach customers beyond your geographic area c. provide an efficient method to provide information about a company and their products d. All of these

d. All of these

The break-even point ________. Select one: a. occurs where a company's total revenue equals its total expenses b. is the point at which a company neither earns a profit nor incurs a loss c. tells a business owner the minimum level of activity needed to keep her company in operation d. All of these

d. All of these

The company history section of the business plan typically includes ________. Select one: a. significant financial and operational events b. highlights of the key goals and objectives the company has accomplished in the past c. a brief description of when and how the company was formed and how it has evolved over time d. All of these

d. All of these

The ideal domain name should be ________. Select one: a. short b. memorable c. easy to spell d. All of these

d. All of these

What can a company do to achieve stellar customer service and satisfaction? Select one: a. Listen to customers with the help of suggestion boxes, focus groups, surveys, and other tools. b. Define what "superior service" means so that customers and employees know exactly what to expect and what to provide. c. Hire friendly, courteous sales and service representatives. d. All of these

d. All of these

Which of the following is a common problem in joint ventures? Select one: a. Incompatible management styles among partners. b. Failure of partners to establish common goals. c. Failure of partners to carefully determine each party's contributions and responsibilities, distribution of earnings, etc. d. All of these

d. All of these

Which of the following is a guideline for becoming a successful international competitor? Select one: a. Make yourself at home in all of the world's key markets - North America, Europe, and Asia. b. Become familiar with foreign customs and languages. c. Consider using partners and joint ventures to break into foreign markets you cannot penetrate on your own. d. All of these

d. All of these

Which of the following is a way to improve customer service? Select one: a. Encourage customers to complain. b. Ask employees for feedback on improving customer service. c. Develop a service theme that communicates the importance of customer service in the company. d. All of these

d. All of these

Which of the following is an important issue that business owners should consider before launching an e-commerce effort? Select one: a. How to develop long-term relationships with customers. b. How to exploit the interconnectivity and the opportunities it creates to transform relationships with its suppliers, customers, and external stakeholders. c. How to measure the success of its Web-based sales effort. d. All of these

d. All of these

Successful e-tailers have discovered that these factors enhance their reputations for online customer service ________. Select one: a. comprehensive FAQ pages and e-mail order confirmation with shipment notices b. visible telephone and e-mail contact information c. quick responses to questions with meaningful information d. All of these factors enhance a Web-based reputation. Feedback

d. All of these factors enhance a Web-based reputation.

Which of the following was not identified as a way for the typical small business to establish a competitive advantage? Select one: a. Doing whatever the company does for its customers better than its competitors b. Improving customer service c. Providing higher quality goods or services d. Lowering prices

d. Lowering prices

Which ratio would be most helpful to a business owner to measure the profit per dollar of sales? Select one: a. Net sales to total assets b. Net sales to working capital c. Net profit to equity d. Net profit on sales

d. Net profit on sales

Which of the following is not a recommended method of collecting competitive intelligence? a. Buy competitors' products or services and assess their quality and features, benchmarking their products and services against yours. b. Watch for employment ads from competitors to determine the types of workers they are hiring. c. Attend trade shows and collect competitors' sales literature. d. Pay competitors' employees to become informants about their companies' strategies, markets, and trade secrets

d. Pay competitors' employees to become informants about their companies' strategies, markets, and trade secrets

Which of the following is not a characteristic of a typical angel investor? Select one: a. Investing money locally. b. Willing to wait seven years or more to cash out an investment. c. Investing in the startup phase of the company. d. Purchasing majority ownership in the company

d. Purchasing majority ownership in the company

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

d. a crisis

A tariff is ________. Select one: a. a law that a government uses to regulate products that are imported into the country b. a prohibition or suspension of foreign trade of specific imports or exports c. the maximum amount of a product that can be imported or exported d. a duty, or tax, that a government puts on products that are imported into the country

d. a duty, or tax, that a government puts on products that are imported into the country

To launch a successful Web site, business owners should consider ________. Select one: a. that flash makes a Web site better b. all the "bells" and "whistles" technology can provide c. that to stand out on the Web, the site really has to sparkle d. a simple design that is easy to navigate

d. a simple design that is easy to navigate

Leasing allows business owners to forecast cash flows more ________ because lease payments are ________ amounts paid over a particular time period. Select one: a. accurately; variable b. often; fixed c. often; variable d. accurately; fixed

d. accurately; fixed

Strategies for successful e-commerce efforts should include all of the following except ________.

d. adding value to recipients by sending spam e-mail

The percentage of shoppers who place at least one item in a shopping cart but never complete the transaction is called the ________. Select one: a. bounce rate b. conversion rate c. cost per acquisition d. cart abandonment rate

d. cart abandonment rate

The single most important ingredient in making a successful public offering is ________. Select one: a. negotiating a favorable letter of intent b. preparing a suitable registration statement c. filing Regulation D with the SEC d. choosing a capable underwriter

d. choosing a capable underwriter

A situation that occurs when a company pays for clicks that are generated by someone with no interest in or intent to purchase its products or services is called ________. Select one: a. an unnatural listing b. paid inclusion c. unpaid inclusion d. click fraud

d. click fraud

The final step in creating a sound export strategy is to ________. Select one: a. find financing b. find your customer c. ship your goods d. collect your money

d. collect your money

Time out of cash is relevant to ________ analysis. Select one: a. business plan b. business model c. strategic d. financial feasibility

d. financial feasibility

A(n) ________ is when a company raises capital by selling shares of its stock to the general public for the first time. Select one: a. debt equity arrangement b. partnership c. venture capital offering d. initial public offering

d. initial public offering

A ________ is an agreement with a bank that allows a small business to borrow up to a predetermined specified amount during the year without making an application each time. Select one: a. floor plan b. factor c. term loan d. line of credit

d. line of credit

On a company's statement of cash flows, depreciation is ________. Select one: a. the difference between the total sources available to the owner and the total uses of those assets b. the owner's total investment at the company's inception plus retained earnings c. creditors' total claims against the firm's assets d. listed as a source of funds because it is a noncash expense, already deducted as a cost of doing business

d. listed as a source of funds because it is a noncash expense, already deducted as a cost of doing business

The ________ serves as the "thesis statement" for the entire business plan and is the broadest expression of a company's purpose and defines the direction in which it will move. Select one: a. marketing strategy b. executive summary c. company history d. mission statement

d. mission statement

The primary disadvantage of equity capital is that the entrepreneur ________. Select one: a. must give up some (perhaps most) of the ownership in the business to outsiders b. must repay it at some point with interest c. experiences the disadvantage of the risk/return tradeoff in the form of higher interest rates d. must give up some (perhaps most) of the ownership in the business to outsiders and experiences the disadvantage of the risk/return tradeoff in the form of higher interest rates

d. must give up some (perhaps most) of the ownership in the business to outsiders and experiences the disadvantage of the risk/return tradeoff in the form of higher interest rates

The final aspect of the financial feasibility analysis combines the estimated earnings and the capital requirements to determine the ________. Select one: a. rate of return on the capital invested b. total capital requirements c. estimated earnings d. net profit

d. net profit

Kevin Abt noticed that people were cooking meals in their homes less often but wanted to avoid the hassle of going out to eat. They wanted to "eat in" without cooking. Abt launched a company, Takeout Taxi, that delivers restaurant-prepared food to his customers' homes and businesses. Takeout Taxi is the result of a(n) ________. Select one: a. weakness b. strength c. threat d. opportunity

d. opportunity

A company that pays a search engine for the right to submit either selected pages or the entire content of the Web site is referred to as ________. Select one: a. web analytics b. Really Simple Syndication (RSS) c. click fraud d. paid or sponsored listings

d. paid or sponsored listings

Customers will typically welcome well-constructed permission e-mail that directs them to company sites for information or special deals, unlike unsolicited and universally despised e-mail known as ________. Select one: a. electronic flyers b. voice mail c. clipboards d. spam

d. spam

The specific group of customers at whom a company aims its good or services is referred to as a ________. Select one: a. market segmentation b. niche marketing c. bootstrap marketing d. target market

d. target market

For the most meaningful interpretation, the small business owner should compare her/his firm's average collection period to ________. Select one: a. other businesses in the same geographic area b. the universal standard of 25 days c. a direct competitor d. the average for the industry and the firm's credit terms

d. the average for the industry and the firm's credit terms

The focus of a small company's marketing plan should be on ________. Select one: a. describing how its products or services are superior to those of competitors b. the competition c. preparing accurate financial forecasts d. the customer

d. the customer

To be successful online, small companies must create Web sites with features that appeal to experienced Web shoppers, such as ________. Select one: a. simple navigation and customer reviews b. solid security and quick access to product information c. videos and blogs d. the successful Web site will include all of these

d. the successful Web site will include all of these

A/An ________ is a private, for-profit organization that purchases equity positions in young businesses that will potentially produce returns of 300 to 500 percent over five to seven years. Select one: a. SB-1 filing b. angel c. commercial bank d. venture capital company

d. venture capital company

Rather than build the current year budget on increases from the previous year's budget, ________ evaluates the necessity of every item. Select one: a. ground-up budgeting b. zero-based accounting c. year-one budgeting d. zero-based budgeting

d. zero-based budgeting

One common mechanism to attract international visitors is to include several ________. Select one: a. colors and symbols reflective of international cultures b. language buttons c. alternative forms of payment options d. images reflecting multiple cultures

language buttona

The amount of time the average person spends online is ________ than she/he spends watching television. Select one: a. less b. almost one-half c. about the same d. more

more

Less than ________ percent of all U.S. companies are publicly-held corporations. Select one: a. 5 b. 12 c. 10 d. 1

1

Ideally, a business plan should be about ________ pages in length. Select one: a. 20 to 40 b. 40 to 75 c. 75 to 100 d. 10

10

The Global Entrepreneurship Monitor reports that the average amount of capital that entrepreneurs use to start small businesses is about ________. Select one: a. $100,000 b. $50,000 c. $25,000 d. $15,000

15,000

The average conversion rate for e-commerce sites is just ________ percent. Select one: a. 6.67 b. 2.55 c. 9.35 d. 1.1

2.55

Only about ________ percent of a typical business' inventory turns over quickly. Select one: a. 80 b. 40 c. 60 d. 20

20

Approximately ________ percent of Web users speak English. Select one: a. 27 b. 37 c. 38 d. 29

27

Small businesses contribute ________ percent of U.S. export sales. Select one: a. 25 b. 40 c. 20 d. 33

33

The cost to check a potential customer's credit at a reporting service starts at $________. Select one: a. 40 b. 5 c. 499 d. 119

40

Rule ________ of the Regulation D exemptions is the most popular. Select one: a. 314 b. 426 c. 202 d. 504

504

An estimated ________ percent of small business owners in the U.S. have Web sites. Select one: a. 90 b. 75 c. 25 d. 82

82

Experts estimate that nearly ________ percent of the world's online population has used the Internet to make a purchase. Select one: a. 66 b. 84 c. 96 d. 46

84

One survey reports that ________ percent of shoppers have gone into a store as a result of an online encounter with a business. Select one: a. 91 b. 72 c. 63 d. 85

91

A cash budget is only as accurate as the ________ forecast from which it is derived. Select one: a. sales b. income c. profit d. receivables

sales

Patel Industries recently filled an order from one of its customers, Oxmoor Gardens, a small garden supply store. Oxmoor's owner recently received an invoice from Patel for $1,278.64 with selling terms of "2/10, Net 30." Therefore, ________. Select one: a. the selling terms indicate that the full amount of the invoice is due within 30 days and Oxmoor will be subject to a 2 percent finance charge for every 10 days that the bill is past due b. the selling terms indicate that Oxmoor must pay 2 percent of the invoice by the 10th day of the month with the balance due in 30 days c. the selling terms indicate that Oxmoor has not yet qualified for a quantity discount and must pay the full amount of the invoice within 30 days d. the selling terms are offering Oxmoor a 2 percent discount if the bill is paid within 10 days; otherwise the full amount of the invoice is due in 30

The correct answer is: the selling terms are offering Oxmoor a 2 percent discount if the bill is paid within 10 days; otherwise the full amount of the invoice is due in 30 days

Refer to the following break-even chart to answer the question(s) below: The area labeled ________ is the "loss area." Select one: a. X b. Z c. Y d. W

W

Customers will typically welcome well-constructed permission e-mail that directs them to company sites for information or special deals, unlike unsolicited and universally despised e-mail known as ________. Select one: a. electronic flyers b. clipboards c. voice mail d. spam

spam

Refer to the following break-even chart to answer the question(s) below: The area labeled ________ represents the firm's fixed expenses, while ________ represents its variable expenses. Select one: a. X; Y b. Z; W c. Y; X d. W; Z

X;Y

You are to prepare a projected income statement for a proposed business venture. Your desired income is $28,000 and you have the following published statistics: This information indicates the net sales on your pro forma "P & L" (income statement) would be: Select one: a. $466,667. b. $491,228. c. $500,000. d. None of these

a. $466,667.

It is recommended that new business owners estimate cash disbursements as best they can and then add on another ________ percent. Select one: a. 10-25 b. 5-10 c. 3-4 d. 25-35

a. 10-25

Small businesses contribute ________ percent of U.S. export sales. Select one: a. 33 b. 20 c. 40 d. 25

a. 33

One survey reports that ________ percent of shoppers have gone into a store as a result of an online encounter with a business. Select one: a. 91 b. 63 c. 85 d. 72

a. 91

The North American Free Trade Agreement (NAFTA) created a free trade area among ________. Select one: a. Canada, Mexico, and the United States b. Japan, Mexico, and Canada c. Mexico, Japan, and the United States d. None of these

a. Canada, Mexico, and the United States

The Boat and Ski Shop, a small retail boat shop, would most likely rely on which of the following methods to finance its inventory? Select one: a. Floor planning b. Discounted installment contracts c. Installment loans d. Trade credit

a. Floor planning

Cost of goods sold is located on which financial statement? Select one: a. Income statement b. Balance sheet c. Statement of cash flows d. All of these

a. Income statement

Which of the following is not a common reason customers leave Web sites before checking out? Select one: a. The privacy policy was not posted. b. The shopping cart was too hard to find. c. The site did not appear trustworthy. d. Total shipping charges were too high.

a. The privacy policy was not posted.

In your training program, you stress to all new employees the importance of customer satisfaction, citing the fact that ________ of the average company's sales come from present customers. Select one: a. a majority b. a small amount c. about one-half d. an undetermined percentage

a. a majority

Many viral products do not charge customers directly but rely on indirect sources of revenue such as _________________. Select one: a. advertising b. new products c. referrals d. new services

a. advertising

The ________ represents a "snapshot" of a business, showing an estimate of its value on a given date, while the ________ is a "moving picture" of the firm's profitability over time. Select one: a. balance sheet; income statement b. income statement; balance sheet c. balance sheet; statement of cash flows d. statement of cash flows; income statement

a. balance sheet; income statement

The number of visitors to a company's Web site who view a single page and leave without viewing other pages is referred to as the ________. Select one: a. bounce rate b. click-stream c. conversion ratio d. stickiness of the site

a. bounce rate

A measurement of the cost a company incurs to generate each purchase or customer registration is the ________. Select one: a. cost per acquisition (CPA) b. conversion ratio c. browser-to-buy ratio d. bounce rate

a. cost per acquisition (CPA)

Suppose and advertisement costs $100 and causes fifty new customers to sign up for the service. This ad has a ____________ of $2.00. Select one: a. cost per acquisition (CPA) b. average cost (AC) c. None of these are correct. d. Cost of Goods Sold (COGS)

a. cost per acquisition (CPA)

The North American Free Trade Agreement (also known as NAFTA) served to ________. Select one: a. create a unified market of 465 million people and $18.1 trillion in goods and services b. eliminate all tariffs among member nations, effective immediately, and raise them to nonmembers c. bring South America, Mexico, the U.S., and Canada together as one market d. mostly benefit the trading relationship between Canada and the United States

a. create a unified market of 465 million people and $18.1 trillion in goods and services

Studies of shifting patterns in age, income, education, race, and other population characteristics are the subject of ________. Select one: a. demographics b. sociographics c. paleontology d. psychographics

a. demographics

The truth is every engine of growth __________________. Select one: a. eventually runs out of gas b. has unlimited potential c. is limited only by the ability of the entrepreneurs running it d. has various levels of potential

a. eventually runs out of gas

Time out of cash is relevant to ________ analysis. Select one: a. financial feasibility b. business plan c. strategic d. business model

a. financial feasibility

Strengths and weaknesses are ________ to the organization. Select one: a. internal factors b. external factors c. factors not belonging d. internal and/or external factors

a. internal factors

A Web site or an application that combines content from multiple sources is a ________. Select one: a. mashup b. wiki c. Really Simple Syndication (RSS) d. widget

a. mashup

Many nations have lowered tariffs they impose on products and services brought into their border and rely on other ________. Select one: a. nontariff structure as protectionist trade barriers b. duty fees c. taxes d. dumping

a. nontariff structure as protectionist trade barriers

One of the most valuable attributes of the Web is the ability to ________. Select one: a. provide companies with instantaneous customer feedback b. enable the site to create an appearance that the organization is able to meet customer needs that, in fact, are not possible based on its actual resources c. encourage the use of credit cards as a means of paying for the online transaction d. eliminate advertising expenses and the amount of printed materials needed to facilitate promotional efforts

a. provide companies with instantaneous customer feedback

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

a. quality problems can be identified much sooner

A contract in which a business selling an asset on credit gets a security interest in that asset (the collateral), protecting its legal rights in case the buyer fails to pay, is a ________. Select one: a. security agreement b. lockbox c. way to protect the buyer d. classic collection blunder

a. security agreement

A firm's cash budget should ________. Select one: a. show the amount and timing of cash receipts and cash disbursements on an annual basis b. cover a longer planning horizon when a firm's pattern is highly variable c. be prepared on a monthly basis for at least one year in advance and cover all seasonal fluctuations d. show the amount and timing of cash receipts and cash disbursements on a quarterly basis

a. show the amount and timing of cash receipts and cash disbursements on an annual basis

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

a. small batches

The total quality management (TQM) concept ________. Select one: a. strives to achieve quality not just in the product or service itself, but in every aspect of the business and its relationship with the customer b. relies on quality inspections through an army of quality control inspectors c. focuses on reducing the time it takes to fulfill a customer's request for a product d. None of these

a. strives to achieve quality not just in the product or service itself, but in every aspect of the business and its relationship with the customer

The most common type of commercial bank loan granted to small businesses is ________. Select one: a. the short-term loan b. floor planning c. the unsecured term loan d. the line of credit agreement

a. the short-term loan

A key customer benefit of a product or service that sets it apart from the competition answers the critical questions every customer asks: "What's in it for me?" and is known as ________. Select one: a. the unique selling proposition (USP) b. total quality management (TQM) c. branding d. its brand identity

a. the unique selling proposition (USP)

To convince lenders and investors to put their money into the venture, a business plan must prove to them that it offers a high probability of repayment or an attractive rate of return. This is the ________ test. Select one: a. value b. competitive c. reality d. attractiveness

a. value

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

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

Business owners new to international business are sometimes shocked ________. Select one: a. by the wide range of labor costs they encounter b. that practices common in the United States (e.g., overtime, women workers, and employee benefits) are restricted, disfavored, or forbidden in other cultures c. that what appear to be "bargain" labor rates turn out to be excessively high after accounting for the quality of the labor force and the benefits their governments mandate d. All of these

all of these

To encourage credit customers to pay invoices promptly, a business owner should ________. Select one: a. ensure that all invoices are clear, accurate, and timely b. state clearly a description of the goods or services purchased and an account number c. include a telephone number and a contact person in case the customer has a question or a dispute d. All of these

all of these

Which of the following is a common problem in joint ventures? Select one: a. Incompatible management styles among partners. b. Failure of partners to establish common goals. c. Failure of partners to carefully determine each party's contributions and responsibilities, distribution of earnings, etc. d. All of these

all of these

Which of the following represents capital? Select one: a. Inventory b. Equipment and machinery c. Cash d. All of these

all of these

Which of the following statements concerning leasing is true? Select one: a. Leasing is an "off-the-balance-sheet" method of financing assets. b. Although total lease payments for an asset are greater than those on a conventional loan, most leases do not require large capital outlays as down payments. c. Leasing gives business owners access to equipment even when they cannot borrow the money to buy it. d. All of these

all of these

The drawbacks of countertrading include which of the following? Select one: a. Countertrade transactions can be complicated, cumbersome, and time-consuming. b. Countertrade transactions can increase the chances that a company will be stuck with merchandise it cannot move. c. Countertrade transactions can lead to unpleasant surprises concerning the quantity and quality of products required in the countertrade. d. All of these

all ofthese

A competitive profile matrix ________. Select one: a. permits the small business owner to divide a mass market into smaller, more manageable segments b. identifies a firm's core competencies c. allows the small business owner to evaluate her firm against competitors on the key success factors for the industry d. creates a road map of action for the entrepreneur to fulfill her company's mission, goals, and objectives

allows the small business owner to evaluate her firm against competitors on the key success factors for the industry

Refer to the following information to answer the question(s) regarding Anita Lupino's toy and game shop: Anita Lupino is planning to open her own toy and game shop. She has conducted a great deal of research at the local library, contacted the industry trade association, and has set up a meeting with a consultant at the SBDC next week. Before she goes to the SBDC, she wants to sketch out an estimated income statement. She reviews the following data from RMA's Annual Statement Studies: If Anita's research suggests that she can expect net sales of $475,000, what net profit could she expect? Select one: a. $202,825 b. $46,550 c. $69,350 d. $156,275

b. $46,550

Sarah's Smart Shop has an inventory turnover ratio of 3 times per year and an average inventory of $156,000. If Sarah could manage her inventory better and increase the number of turnovers to the industry average of 6 times per year, what average inventory would she need to generate the same level of sales? Select one: a. $468,000 b. $78,000 c. $312,000 d. $52,000

b. $78,000

In a survey of members of Generation Z, ________ percent said they would rather save money than spend it. Select one: a. 44 b. 57 c. 31 d. 25

b. 57

A business that turns over its receivables 5.9 times a year would have an average collection period of about ________. Select one: a. 30 days b. 62 days c. 2/10, net 30 d. 71 days

b. 62 days

An estimated ________ percent of adults participate in social networks and the highest level of participation is social media is among adults ________ 30 years of age. Select one: a. 65; over b. 73; under c. 55; over d. 55; under

b. 73; under

Which of the following is a danger of using a niche strategy? Select one: a. Entering a niche requires adaptability in your initial plan. b. All of the above c. Niches can go away. d. Niches change.

b. All of the above

________ are those items of value the business owns; ________ are those things the business owes. Select one: a. Ratios; equities b. Assets; liabilities c. Liabilities; assets d. Equities; liabilities

b. Assets; liabilities

________ is the process of communicating a company's unique selling proposition to its target customers in a consistent and integrated manner. Select one: a. Marketing b. Branding c. Entertailing d. Selling

b. Branding

For the question(s) below, consider the following competitive profile matrix: Which company has the worst location? Select one: a. Impossible to tell from the information given. b. Competitor 1 c. Competitor 2 d. Your company

b. Competitor 1

________ are domestic wholesalers who do business in foreign markets, buying goods from domestic companies and selling them in foreign markets, often handling competing lines. Select one: a. Foreign distributors b. Export merchants c. Export trading companies d. Resident buying offices

b. Export merchants

Which of the following is not a question to ask to evaluate an industry? Select one: a. How fast is it growing? b. How sparse is the industry? c. What threats does the industry face? d. How large is the industry

b. How sparse is the industry?

Question text Which of the following is not a barrier to entry? Select one: a. Specialized knowledge b. Large number of buyers c. Capital requirements d. Access to distribution channels

b. Large number of buyers

Which of the following techniques does marketing consultant Faith Popcorn recommend to small business owners interested in tracking market trends? Select one: a. Watch what the large corporations in your industry are doing. b. Read as many current publications as possible. c. Talk with two to three people at random each week to hear what they are buying and why. d. Hire a top-10 market research firm to track trends for you.

b. Read as many current publications as possible.

________ are positive internal factors that contribute toward accomplishing the company's mission, goals, and objectives, while ________ are negative internal factors that inhibit the accomplishment of a firm's mission, goals, and objectives. Select one: a. Threats; opportunities b. Strengths; weaknesses c. Opportunities; threats d. Weaknesses; strengths

b. Strengths; weaknesses

Which of the following is not a liquidity ratio? Select one: a. Current ratio b. Total asset turnover ratio c. Quick ratio d. None of these

b. Total asset turnover ratio

The "big three" of cash management include ________. Select one: a. accounts receivable, prices, and expenses b. accounts receivable, accounts payable, and inventory c. accounts payable, accounts receivable, and taxes d. accounts receivable, overhead, and inventory

b. accounts receivable, accounts payable, and inventory

In asset-based borrowing, the ________ rate is the percentage of an asset's value that a lender will lend. Select one: a. margin b. advance c. discounted d. prime

b. advance

The ________ shows what assets the business owns and what claims creditors and owners have against those assets, and is built on the basic accounting equation: Assets = Liabilities + Owner's Equity. Select one: a. sources and uses of funds statement b. balance sheet c. income statement d. cash budget

b. balance sheet

Gathering competitive intelligence, such as "dumpster diving" in a competitors' trash, may raise questions regarding ________. Select one: a. a cost benefit analysis b. ethical standards c. the competitive profile matrix d. the integrity of the data

b. ethical standards

The ________ is also known as the "elevator pitch" and is written last, but is included as the first part of the business plan and should summarize all the relevant points in about two pages. Select one: a. loan proposal b. executive summary c. business profile d. business history

b. executive summary

The Fair Debt Collection Practices Act prohibits business owners from ________. Select one: a. hiring debt collection attorneys b. harassing people who are past due c. sending invoices the same day product is shipped d. referring past due bills to collection agencies Feedback

b. harassing people who are past due

The first place an entrepreneur should look for startup capital is ________. Select one: a. the Small Business Administration b. his own savings c. a bank d. a venture capitalist

b. his own savings

a. generate lead for potential franchisees b. identify the country or countries that are best suited to the franchiser's business concept c. structure the franchise deal d. select quality candidates

b. identify the country or countries that are best suited to the franchiser's business concept

When creating a Web site, the goal is to create a design ________. Select one: a. in which customers cannot relate b. in which customers "see themselves" when they visit c. that is flashy d. that is inclusive of everyone in most every situation

b. in which customers "see themselves" when they visit

The ________ ratio shows the portion of each sales dollar remaining after deducting all expenses. Select one: a. net profit to equity b. net profit on sales c. net sales to total assets d. net sales to working capital

b. net profit on sales

When looking for an angel, the key is ________. Select one: a. looking across industries b. networking c. using computer matches d. waiting until you need the money

b. networking

The three "tests" associated with a business plan are ________. Select one: a. competitive, profitability, and value b. reality, competitive, and value c. reality, value and litmus d. value, reality, and profitability

b. reality, competitive, and value

The first step to create a sound export strategy is to ________. Select one: a. analyze your product or service b. recognize that even the smallest companies and least experienced entrepreneurs have the potential to export c. analyze your commitment d. research markets and pick your target

b. recognize that even the smallest companies and least experienced entrepreneurs have the potential to export

Collecting demographic data from The Statistical Abstract of the United States is an example of ________ research. Select one: a. primary b. secondary c. windshield d. tertiary

b. secondary

The single most common reason for abandoning online shopping carts is ________. Select one: a. there was insufficient product information available b. shipping and handling charges were too high c. the inability to compare the final price before buying d. delivery times were too long and the checkout process required too much information and time

b. shipping and handling charges were too high

Question text Products or services that may be sought as alternative solutions (e.g., purchasing tax planning software rather than paying a CPA to assist with preparing your taxes) are referred to as ________. Select one: a. competitive alternatives b. substitute products c. buyers products d. rivalry products

b. substitute products

The reality test that a business plan must pass to attract financing from lenders and investors involves proving ________. Select one: a. that the business venture will provide lenders and investors a high probability of repayment or an attractive rate of return b. that a market for the company's product or service actually does exist and that the company can actually build it for the cost estimates included in the plan c. that the industry in which the business will compete is growing faster than the overall economy and has room for more competitors d. that the company can gain a competitive advantage over its key competitors

b. that a market for the company's product or service actually does exist and that the company can actually build it for the cost estimates included in the plan

Cash requirements can be determined by dividing cash expenses by ________. Select one: a. accounts receivables b. the average inventory turnover c. liabilities d. total assets

b. the average inventory turnover

Exchanging goods and services for other goods and services, or ________, is an effective way for a small business to conserve cash. Select one: a. credit sales b. arbitrating c. bartering d. leasing

bartering

A ________ is a company's "face" in the marketplace and communicates a key message to the target market. Select one: a. unique selling proposition (USP) b. brand c. blog d. logo

brand

A good advice to follow in customer surveys is ________. Select one: a. All of the above b. "You've got them hooked, get all you can from them" c. "Keep them short" d. "Be as detailed as possible"

c. "Keep them short"

Which of the following is not a secondary source of market research data? Select one: a. Trade publications b. Census data c. Focus groups d. Magazines

c. Focus groups

Which of the following is a security software that can trace a hacker's location? Select one: a. A viral site b. Virus detection software c. Intrusion detection software d. A firewall

c. Intrusion detection software

________ ratios help a business owner evaluate the company's performance and indicate how effectively the business employs its resources. Select one: a. Liquidity b. Profitability c. Operating d. Leverage

c. Operating

Tools that measure a Web site's ability to attract customers, generate sales, and keep customers coming back are ________. Select one: a. cost per acquisition tools b. conversion tools c. Web analytics d. recency

c. Web analytics

For the question(s) below, consider the following competitive profile matrix: Which of the following statements is true? Select one: a. The most important of the key success factors is location. b. Your company's most serious weakness is its poor quality. c. Your company's most vulnerable point against these two competitors is in the area of on-time delivery. d. Overall, Competitor 2 is the strongest of these three companies.

c. Your company's most vulnerable point against these two competitors is in the area of on-time delivery.

The largest single source of external equity capital for small businesses is ________. Select one: a. the stock market (i.e., "going public") b. Small Business Administration loans c. angels d. venture capitalists

c. angels

The primary purpose of the five forces matrix is to ________. Select one: a. assess the five forces as compared to a standard value b. provide a graphic c. assign values to each of the five elements d. list the five forces in rank order

c. assign values to each of the five elements

A common mistake entrepreneurs make is ________. Select one: a. conducting online research, which is too impersonal and does not yield accurate information b. conducting informal research c. assuming that a market exists for their product or service d. taking too much time to conduct planning and research

c. assuming that a market exists for their product or service

According to Porter's 5-forces model, a substitute for Coca-Cola, the carbonated cola drink, would be ________. Select one: a. Dr. Pepper b. Pepsi c. bottled water d. Mountain Dew

c. bottled water

More companies fail for the lack of ________ than for the lack of ________. Select one: a. vision; profit b. net revenue; gross revenue c. cash; profit d. profit; cash

c. cash; profit

Many Web sites seek to create, develop, and facilitate a ________. Select one: a. site that appeals to a broad range of diverse visitors b. technology that is fast and complex c. community of customers with similar interests d. site that provides a variety of information that most anyone can find useful

c. community of customers with similar interests

Venture capitalists look for ________ as the most important ingredient in the success of any business. Select one: a. innovation b. a competitive edge c. competent management d. a growth industry

c. competent management

For an entrepreneur, a business plan ________. Select one: a. tends to stress how the entrepreneur will operate rather than detailing what she/he wants to accomplish b. is of relatively little importance due to the dynamic nature of the marketplace c. contains both a marketing plan and a financial plan d. is synonymous with the marketing plan

c. contains both a marketing plan and a financial plan

The process of systematically creating the optimum experience for customers every time they interact with the company is ________. Select one: a. total quality management (TQM) b. time compression management (TCM) c. customer experience management (CEM) d. guerilla marketing

c. customer experience management (CEM)

The Lean Startup Model often works because _______________. Select one: a. it is less expensive to set up b. cost are so inexpensive c. customers often don't know what they want. d. All of these are correct

c. customers often don't know what they want.

Prototypes usually point out potential problems in a product's ________. Select one: a. price b. color c. design d. marketing

c. design

The ______________ is the mechanism that startups use to achieve sustainable growth. Select one: a. paid promotion b. Social Media Strategy c. engine of growth d. SEO

c. engine of growth

For entrepreneurial companies that lack brand and name recognition, and if building name recognition is one of the keys to success on the Web, one effective and affordable option may be to ________. Select one: a. rely on viral marketing b. invest more in online promotion c. form strategic alliances with larger companies that can add credibility d. develop better brand recognition

c. form strategic alliances with larger companies that can add credibility

The Internet offers entrepreneurs tools to provide existing and potential customers with meaningful information ________. Select one: a. in a passive, one-directional manner b. for those with advanced high-tech skills c. in an interactive rather than passive setting d. in a complex and difficult-to-manage method

c. in an interactive rather than passive setting

When developing a company's mission statement, an entrepreneur should remember to ________. Select one: a. write the statement alone without anyone else's interference b. omit statements about her/his values because they may turn some stakeholders off c. keep it short and simple d. All of these

c. keep it short and simple

The first obstacle an entrepreneur must overcome on the way to creating a truly global business is ________. Select one: a. finding a joint venture partner b. locating motivated, multilingual managers for overseas assignments c. learning to think globally d. finding overseas distributors for the company's products

c. learning to think globally

When investing surplus cash, the small business owner's key objectives should be on the ________ of the investment. Select one: a. current income b. high yields c. liquidity and safety d. long-term yield

c. liquidity and safety

When bargaining power of buyers is ________, the industry is ________ attractive. Select one: a. moderate; less b. low; less c. low; more d. high; more

c. low; more

Entrepreneurs who are considering importing goods and services or outsourcing their manufacturing to foreign countries should begin by ________. Select one: a. establish a target market for your product b. do your groundwork once you arrive c. making sure that importing or outsourcing is right for their business d. do your research before you leave home

c. making sure that importing or outsourcing is right for their business

The biggest barrier facing companies that have never exported is ________. Select one: a. locating a trade intermediary to represent them in foreign markets b. finding the financing to launch an export program c. not knowing where or how to start d. winning government approval to begin selling in foreign markets

c. not knowing where or how to start

The enactment of the Affordable Health Care Act in 2010 is an example of a ________ change. Select one: a. demographic b. economic c. political and legal d. technological

c. political and legal

A combination of news covered by the media that boosts sales without having to pay is best described by the term ________. Select one: a. bootstrap marketing b. entertailing c. public relations d. data mining

c. public relations

103) Many new businesses require that an entrepreneur have a certain set of knowledge, experiences, and skills to have any chance of success. This is called entrepreneurial ________. Select one: a. trait b. chutzpah c. readiness d. grit

c. readiness

The foundation of every business is ________. Select one: a. its products and services b. doing whatever it takes to earn a profit c. satisfying the customer through a customer-driven marketing strategy d. operating in a socially responsible manner

c. satisfying the customer through a customer-driven marketing strategy

Once a small business has established a firm written credit policy and has clearly communicated it, the next step in building an effective credit policy is to ________. Select one: a. create a simple credit application b. determine what percentage of sales are being written off as bad debt c. send invoices promptly d. create a "tracking file" of events

c. send invoices promptly

The Internet is an example of a ________ force. Select one: a. economic b. demographic c. technological d. sociocultural

c. technological

To avoid unpleasant surprises in launching an e-commerce effort an entrepreneur should ________. Select one: a. cancel all current advertisements in other media b. avoid being talked into establishing a privacy policy c. test the Web site with real customers to make sure it is easy to navigate d. not try to out-guess customers, and handle order fulfillment as orders come in

c. test the Web site with real customers to make sure it is easy to navigate

The biggest benefit of a public stock offering is ________. Select one: a. the ability to use its stock to attract and retain key managers and employees b. a listing on a stock exchange c. the capital infusion the company receives d. the ability to use its stock to acquire other companies

c. the capital infusion the company receives

The Lean Startup works only if we are able to build an organization as adaptable and fast as ____________. Select one: a. its competitors b. resources can be acquired c. the challenges it faces

c. the challenges it faces