SBM - Exam 2

Juan's Auto Repair shop is preparing its income statement. The report shows sales revenue is $80,000, cost of goods sold at $30,000, and sales, general, and administrative expenses of $25,000. Since Juan uses the single-step format for his income statement, what is Juan's net income?

$25,000

Karla's Koffee shop has $70,000 in assets and $30,000 in liabilities. What is the owners equity?

$40,000

Claude is thinking about starting an online business selling high- end men's leather accessories - wallets, boots, hats, and belts. When looking at the market size during his secondary research, Claude is first interested in the TAM. Which statistic would help Claude determine the TAM for his business?

49.2 percent of the US population is male

Walter Bradham, the owner of Bradham Corporation muddled his personal finances with his business accounts. Following a suit into the financial irregularities at Bradham Corporation, a court subjected the Corporation to the decision of piercing the veil. Which of the following course is the court most likely to take in this case?

It will dissolve the corporation into a sole partnership under Bradham.

Each June, a small chocolate shop in a busy downtown area sold chocolate covered fresh strawberries. They bought the strawberries for .20 cents apiece and sold them in-store for $1.50. The shop owner discovered that when he offered the strawberries delivered directly to people working in the office building near him, he could charge $12 for a box of four. When he introduced delivery, he sold 800 boxes for gross sales of $9600 and received customer feedback to please repeat the delivery option next June. Which statement best describes the premium the shop could charge?

The price customers are willing to pay is determined by their perception of value received

Which statement about handling an early termination is true?

a "cap" or limit on how long to continue paying rent aids in easy lease termination

which business location option requires you giving them a stake in your company?

accelerator

Which answer option is a disadvantage of choosing an LLC as a business form?

adding or reducing members requires consent from all other members

One customer may buy a pair of jeans because of the brand name, with another may buy the jeans for the fit. if you market to both of these customers, you would be marketing to them based on the :

benefit segmentation

Orion Inc. was started as a small organization with five employees. After the first year's profits were made, the owners decided to invest the profits in expanding the business. This is an example of financing the business using _____.

bootstrapping

after being in business for 24 months, Paul's auto spare parts company Chromson Inc. grows to a relatively stable size. Which scenario would be Paul's primary financial management need at this stage?

building owner's wealth

setting the price for an item relatively low and then charging much higher prices for the expenditures it uses is called :

captive pricing

an inconsistency between experience and belief refers to

cognitive dissonance

Joshua suffered a serious knee injury at work after a machine he was using malfunctioned. Joshua plans to sue for compensation from Milch Enterprises, the company that built that machine. Joshua's attorney wants a percentage of the compensation if it is proven that Milch Enterprises' negligence caused the accident. Which of the following types of legal fee would Joshua be paying to his attorney?

contingency fees

When Shay bought his new phone, he also bought a screen cover and a protective case to keep it in. This is an example of :

cross selling

It is preferable to hire a moderately qualified person if there is an immediate need for someone

false

Liquidity is a measure of the ability of a business to meet both short-term and long-term obligations.

false

Services have separability of production and consumption

false

Something that is essential to how you live and does not have many substitutes or alternatives is called an elastic product

false

if a contractor subcontracts a portion of the work and the subcontractor fails to produce the work, the contractor is off the hook for any legal responsibilities

false

perks is a great way to provide long-term boosts in motivation

false

the close of a sale is the end of the sale

false

values listed in the balance sheet reflect an asset's current value

false

when a business enters a phase of rapid growth, one of the challenges it faces is that very few sources of money are available to support its growth

false

__________ refers to the value of a business that exceeds the sum of the value of all individual assets but that cannot be sold separetly from the business

goodwill

Arbitration differs from mediation in that arbitration:

has limited appeal possibilities

The first time Jena visited Blue Corals Inn, a restaurant in her neighborhood, she was delighted with the food and service quality. However, the next time she dined at the same place, the restaurant's food and service seemed to have lost its quality. This scenario best illustrates the _____ characteristic of services.

heterogeneity

which of the answer options is an example of a typical behaviorally based interview question?

how have you adapted to a difficult situation

Which of the following statements is true of sales forcasting?

in many cases, the best sales forecast you can come up with is an educated guess

for an owner, the main financial management emphasis while transferring a business to family members must be to

increase asset value

Which answer option is an example of debt financing?

incubators

Which of these arguments would be helpful in deflecting vicarious liability?

independent contractor argument

Which scenario would implicate emplpoyee empowerment

letting employees make the on-the-spot decisions for the companies best interest

__________ ratios measure the relative risk that a business setback could cause bankruptcy

leverage

When evaluating job prospects, if you look up one job candidate on social media you must:

look up every candidate

Price competition starts to rise, and manufacturers find ways to cut costs or introduce new features to keep or gain market share in the ________ stage of the product life cycle

maturity

which statement is true regarding small-claims court?

most small-claims courts are designed so that ordinary citizens can bring their cases in

Neil places an advertisement for his pastry shop, Neil's Pastries, in the local newspaper. He includes his phone number, website, e-mail address, and postal address in the advertisement so that prospective customers have the option to contact him in the way they feel most comfortable. Neil is a _____.

multichannel marketer

Bob has been running the Handy Hardware Store for a few years now. As the business grew he hired several mechanics who are now middle-aged and good at their jobs. Bob's son, Billy, is just out of college. Bob would like his son to take over the business, but is concerned that the middle-aged workforce might not receive the right guidance for the execution of the business from Young Billy. He is also concerned about the displeasure of the other employees might have at hiring Billy to run the business. If Bob hands over the business to inexperienced Billy in spite of having several well-qualified, deserving, and experienced successors among his other staff, his management philosophy would be an example of :

nepotism

___________ analysis is based on the concept that a dollar to be received right now has more utility than does a dollar to be received at some time in the future

net present value

Alana, the owner of a small dress-making establishment called Mantua Fab, decides to hire assistants for design, sewing, and other tailoring jobs. After Mantua Fab finished basic design, Alana sends certain items of clothing to be embroidered and hemmed by another company in the same city. This strategy is referred to as :

outsourcing

making no distinction between sick, vacation, and personal days and allowing employees a set number of days off each year to be used at their discretion:

prevents employees from abusing sick days

to avoid breaking the _________ with employees, a small business owner should denote strict limits on what is promised to emplpyees and how and when those promises will be delivered

psychological contract

Ty ran a shop that sold and traded sports cards and sports memorabilia. He bought space on a billboard overlooking one of the main highways into the city and included the shop's phone number (555-CARDS). The shop soon received a flood of phone calls inquiring about his location, stock, and business hours. The number of customers entering the store increased by tenfold and his sales doubled. Every person who called the shop because they saw the billboard are :

sales leads

Which answer option is an example of a variable cost

shipping

Which answer option is more indicative of a business's financial strength?

short-term investments

__________ is provided by state and local governments, primarily to encourage specific activities that are expected to improve the blighted areas or provide additional emplpyment

tax abatement

which financial report provides the value of the things the business owns and who has a claim on that value?

the balance sheet

Some hotels offer beds made by specific manufacturers, such as Sleep Number beds or Tempur- Pedic beds. The bed manufacturers benefit because it has the potential to move a prospective customer (anyone who recently comparison shopped for a new mattress) to which step of the customer development funnel?

the consideration step

the weighted average cost (WAC) refers to :

the expected average future cost of funds

an implication of the bounded rationality models of management is that

the more information available to be included into the decision process, the less efficient that process will be

which statement is true of a probationary period?

the time period allowed for probationary periods are typically dictated by state laws

a ________ is a type of intellectual property, not created by the government but is information known to certain people in a comoany that makes that company more competitive

trade secret

if the business is a corporation or an LLC, the owner can only lose what he or she has invested in the business

true

if your company is internet based, your serviceable available market could be as large as your total available market

true

one of the reasons bootstrapping is so common among small business start-ups because external equity capital is not available for most start-ups

true

there is a general formula for generating interest in your product or service and the first step involves putting together a list of potential clients, called "prospecting."

true

which of these is an advantage of sole proprietorship

unique tax advantages

Which statement is true of the total product approach?

using the total product approach can help you get inside your customers' heads

In which situation might the balance sheet under report a firms financial strength?

when R&D is a major strength of a company