Business Final

David wants to open a new gymnasium with state-of-the-art equipment and qualified trainers. However, he can only afford either of the two. He decides to get the equipment first to start the gym. However, without qualified trainers to operate the equipment, David loses his customers and is forced to shut down the gym. Which of the following threats is most likely highlighted in the given scenario? High risk of failure Too little money Lack of knowledge Bigger regulatory burden

Too little money

FoodieGo, a catering company, is owned by foreign investors and local businessmen. Its earnings are equally divided among its members. It does not face the problem of double taxation as taxes are only levied on the personal income of the members. The owners of FoodieGo do not have personal liability for any debts incurred by the company. In the given scenario, FoodieGo is an example of a _____. limited liability company corporation limited partnership sole proprietorship

limited liability company

Ronald, Jamie, Ben, and Joseph are colleagues who want to start a company of their own. All of them want to be actively involved in managing the business. However, they do not want any personal liability for any debts incurred by the company. In this scenario, they should most likely get involved in a _____. general partnership joint liability partnership limited liability partnership limited partnership

limited liability partnership

A _____ is a partnership arrangement that includes at least one general partner and at least one limited partner. general partnership limited partnership joint liability partnership mutual-bondage partnership

limited partnership

Which of the following is a similarity between a general partner and a limited partner in a limited partnership? Both can actively participate in the management of the company. Both lack the protection of limited liability. Both have no share in the company's profits. Both contribute financially to the company.

Both contribute financially to the company

When people use the term "corporation" without specifying which type, they are generally referring to a(n) _____. statutory close corporation nonprofit corporation S corporation C corporation

C corporation

Lowell runs a unisex salon and has six 10-hour workdays. If a customer requests him to stay open on the seventh day, he always obliges. He also provides home services if requested. Which entrepreneurial characteristic is most likely highlighted in the given scenario? Self-reliance Confidence Energy Vision

Energy

Who among the following is likely to enjoy job autonomy? Jayne, whose tasks are well defined and who follows a preset process Adam, who reports to his manager who oversees and controls every step of the process Esther, who has a free hand and authority in her role as project coordinator Deborah, whose manager believes that employees need to be constantly directed

Esther, who has a free hand and authority in her role as project coordinator

Which of the following statements is true of the formation of general partnerships? Expert legal assistance can be acquired when drawing up a partnership agreement. It is illegal to start a partnership on the basis of a verbal agreement. A general partnership consists of a limited number of members. A general partnership refers to business unions formed through involuntary partnership agreements.

Expert legal assistance can be acquired when drawing up a partnership agreement.

Who among the following is the most appropriate person to start his or her own venture? Gita, who has been an event manager for five years but discontinues her job as she wants to spend enough time with her one-year-old child Linda, who has been working as an assistant manager for over a year but cannot make decisions on her own Mira, who is intolerant of uncertainty and becomes emotionally depressed at the sign of any form of financial distress in her family Laura, who is against approaching others for funds and only has enough savings to keep her business afloat for one year

Gita, who has been an event manager for five years but discontinues her job as she wants to spend enough time with her one-year-old child

Which of the following is one of the largest crowdfunding sites in terms of traffic? Futurelearn.com Cesim.com Gofundme.com Businessinsider.com

Gofundme.com

Which of the following statements is true of a typical franchise agreement? It is given to the franchisee 14 days before the Franchise Disclosure Document is prepared. It includes the standards established by the franchisee. It is a long, complex document, covering 23 separate major topics and sometimes running well over 100 pages. It requires the franchisee to pay an initial fee.

It requires the franchisee to pay an initial fee.

Which of the following features of a sole proprietorship proves that it is a risky endeavor? The complications associated with operating in more than one state Its lack of continuity The potential for disagreements Its unlimited liability

Its unlimited liability

The owners of limited liability companies (LLCs) are called members because: they can only be individuals and not foreign investors or other corporations. LLCs are not considered separate and distinct from their owners. they share the same interests in the firm as common stockholders. LLCs are neither corporations nor partnerships.

LLCs are neither corporations nor partnerships.

Which of the following is a difference between strategic planning and tactical planning? Strategic planning is done by top-level managers, whereas tactical planning is done by middle managers. Strategic planning deals with day-to-day manufacturing activities, whereas tactical planning deals with determining a vision. Strategic planning focuses on the short-term objectives of a firm, whereas tactical planning focuses on the long-term objectives of a firm. Strategic planning deals with determining specific action steps, whereas tactical planning deals with determining broad action steps.

Strategic planning is done by top-level managers, whereas tactical planning is done by middle managers.

The management of a telecommunications company informs the members of its sales team that if they continue to underperform, the management will have no other option but to downsize the team. In this scenario, the approach adopted by the management reflects the assumptions of _____. equity theory Theory Y Theory X expectancy theory

Theory X

Adam strongly believes that his employees have a positive attitude toward their work. He sees in them a potential to take risks and a greater capacity for imagination and creativity if motivated by rewards. In this scenario, Adam's views about his employees are consistent with the assumptions of _____. Theory X Theory Y hierarchy of needs theory equity theory

Theory Y

Which of the following is an advantage of limited liability companies (LLCs)? They can have any number of owners. The process of formation of an LLC is simple and fast. They are exempted from paying annual franchise tax. They do not need to register as foreign companies when doing business in other states.

They can have any number of owners.

Which of the following statements is true of entrepreneurs who are tolerant of uncertainty? They do not accept financial risk willingly. They view the world in shades of gray. They never stake their reputation on the success of an unproven product. They are not self-reliant but are extremely confident.

They view the world in shades of gray.

In the context of funding options for small businesses, the _____ assists entrepreneurs by partially guaranteeing loans from local commercial lenders. Federal Reserve Patent and Trademark Office U.S. Small Business Administration Department of the Treasury

U.S. Small Business Administration

Which of the following funding options provides advice and guidance to start-up businesses along with the funds? Crowdfunding Venture capital Treasury bills Promissory notes

Venture capital

James is always keen on putting his ideas into action regardless of the outcome. He perfects his craft by trying out different possibilities. If he is dissatisfied with the result, he tries out a different method but does not give up. Which entrepreneurial characteristic is highlighted in the given scenario? Docility Self-reliance Vision Conformity

Vision

Which of the following is a powerful contribution made by small businesses to the U.S. economy? Mergers of billion-dollar corporations Powering the stock market Vitalizing inner cities Accounting for all private sector output

Vitalizing inner cities

Fabotels is a hotel aggregator that buys budget hotels that succumb to financial losses and then refurbishes them under the company's brand name. Fabotels recently purchased Ravine Comforts, a small lodge that was running into huge debts. The business deal between Fabotels and Ravine Comforts exemplifies a(n) _____. acquisition horizontal merger corporate spin-off divestiture

acquisition

In the event that a large company has to downsize, the middle-aged workers who are laid off find it difficult to find new jobs. When such workers decide to start their own businesses, they: become welfare recipients. are called necessity entrepreneurs. become post-retirement workers. are called baby boomers.

are called necessity entrepreneurs.

A textile corporation has two hundred odd stockholders. As it is inconvenient for so many stockholders to manage the company, the stockholders elect a group of individuals to oversee the company's operation and to represent their interests. In this scenario, the stockholders elect a _____. board of valuers board of directors board of corporators board of regents

board of directors

Small business start-ups are likely to find that getting commercial loans are: difficult because lenders are reluctant to give loans to firms that do not have a track record. one of the most flexible ways of obtaining financing because local bankers are usually eager to establish relationships with new companies. the most difficult because start-ups require higher financing than what banks can offer. the best way to obtain all the financing they need as lenders usually get an ownership stake in the companies.

difficult because lenders are reluctant to give loans to firms that do not have a track record.

When a business that is incorporated in one state does business in other states, it is called a(n) _____ in the state where it is incorporated. statutory corporation overseas corporation domestic corporation alien corporation

domestic corporation

The primary reason people choose to become entrepreneurs is to: avoid difficult challenges. avoid uncertainty. earn more money. develop evolutionary business models.

earn more money.

Expectancy theory advocates that: workers should be given challenging, creative tasks so that they push themselves harder to perform better. employees will continue to perform only if they believe that their efforts are recognized. employees should be punished if they consistently perform poorly. workers will not be motivated if their reward is lower than the rewards of other workers for the same amount of work.

employees will continue to perform only if they believe that their efforts are recognized.

Jacob is a hardworking employee in a public relations firm. He is very punctual and works ten-hour days. However, he earns less than his colleague who is irregular and works only seven-hour days. When Jacob comes to know of this, he becomes dejected and decides to quit his job. The given scenario exemplifies _____. equity theory temporal motivation theory job enrichment theory Theory X

equity theory

A(n) _____ cannot distribute dividends to its members. S corporation C corporation not-for-profit corporation statutory close corporation

not-for-profit corporation

As one of the senior Human Resource managers, Ramona is responsible for conducting orientation sessions for new employees in her company. In her sessions, Ramona uses a visual representation to explain the composition and structure of the company to the new employees. In this scenario, Ramona uses a(n) _____. operational plan business model network model organization chart

organization chart

In the context of Maslow's hierarchy of needs theory, the scenario that reflects the fulfillment of the self-actualization needs of an employee is him or her: participating in a fun team activity. participating in a campaign to feed the poor. availing the gym facility at his or her workplace. experiencing a positive work culture.

participating in a campaign to feed the poor.

When buying a franchise, _____. the first-year failure rate is very high the initial purchase price can be steep it can be hard to get credit from suppliers it takes sheer sweat equity to build a customer base

the initial purchase price can be steep

Buying an established business is a better plan than starting your business from scratch because: you have more creative freedom. you can choose your stakeholders. the organizational structure is in place. the chance of first-year failure is zero.

the organizational structure is in place.

The _____ of a firm includes managers who set the overall direction of the firm, articulating a vision, establishing priorities, and allocating time, money, and other resources. top management middle management first-line management supervisory management

top management

Angela runs a fashion boutique for women. Her customers can use an online editing software to create a rough image of the design and style they want Angela to use. The opportunity of _____ is highlighted in the given scenario. using technology having lower overhead costs providing homogenous service exploiting market niches

using technology

A _____ is a formal document that describes a business concept, outlines core business objectives, and details strategies and timelines for achieving those objectives. business warrant business resource business directory business plan

business plan

A(n) _____ is a voluntary agreement under which two or more people act as co-owners of a business for profit. vertical merger partnership S corporation acquisition

partnership

In the context of management skills, top-level managers must demonstrate excellent: conceptual skills. tactical skills. technical skills. operational skills.

conceptual skills.

Hot and Black Tide Inc., an electronics manufacturer, merges with Crimp Corp., a food manufacturing brand, to make the firms less vulnerable to adverse conditions in any single market. This scenario is an example of a(n) _____. horizontal merger vertical merger conglomerate merger market extension merger

conglomerate merger

In the context of management planning, _____ refers to planning for unexpected events, usually involving a range of scenarios and assumptions that differ from the assumptions behind the core plans. strategic planning tactical planning operational planning contingency planning

contingency planning

A _____ is a form of business ownership in which the business is considered a legal entity that is separate and distinct from its owners. sole proprietorship partnership cooperative corporation

corporation

In the context of organizing, the term _____ refers to the division of workers into logical groups. employee separation span of control departmentalization decentralization

departmentalization

A firm considers _____ to increase size and market power within the industry. a buyer-supplier consolidation a conglomerate consolidation vertical mergers horizontal mergers

horizontal mergers

According to the Global Entrepreneurship Monitor (GEM), the most effective way to evaluate entrepreneurship levels is by phase. A country's total early-phase entrepreneurship rate includes the: percentage of adults who have been running their own business from three months to 3.5 years. number of middle-aged workers who have turned into necessity entrepreneurs after being laid off from their corporate jobs. percentage of millennials who have decided to start their own venture after retirement. number of adults who have proven their entrepreneurship capabilities despite repeated failures.

percentage of adults who have been running their own business from three months to 3.5 years.

Norman owns a large number of shares in a telecommunications corporation. Despite that, he does not have the right to vote in a meeting held specifically to elect the CEO of the company. In this scenario, Norman is most likely a _____. general partner limited partner common stockholder preferred stockholder

preferred stockholder

In the context of a SWOT (strengths, weaknesses, opportunities, and threats) analysis of a company, which of the following is an example of an external opportunity? Lower costs and higher profit margins New social trends in the market Greater restrictions on trade in foreign markets Aggressive competition in the same industry

New social trends in the market

Svelter Corporation does not face the problem of double taxation as the Internal Revenue Service (IRS) does not tax the earnings of the company separately. Instead, taxes are only levied on the personal income of the stockholders. A limitation, however, is that the company is only allowed to have a maximum number of 100 stockholders at a time. Given this information, Svelter Corporation is a(n) _____. S corporation C corporation not-for-profit corporation statutory close corporation

S corporation

Melissa runs a small restaurant that specializes in serving continental cuisine. Every Sunday, she visits the farmers' market to buy the ingredients for her dishes. She handpicks each item to maintain the quality of her food. Which entrepreneurial characteristic is highlighted in the given scenario? Vision Self-reliance Docility Confidence

Self-reliance

In the context of evaluating an organization's competitive position, SWOT analysis (strengths, weaknesses, opportunities, and threats) is a strategic planning tool that helps companies: articulate their essential reason for being. define their purpose and values, which provide the framework for all their plans. assess where they stand relative to the competition. evaluate the results of their plans and incorporate all the lessons learned.

assess where they stand relative to the competition. evaluate the results of their plans and incorporate all the lessons learned.

Mauve starts a business that specializes in procuring and selling antique items. Her business caters specifically to individuals who have high-income jobs and who like collecting unique artifacts. Mauve does not have much competition and can decide the prices of her products without any external influence. The opportunity of _____ is highlighted in the given scenario. providing personal customer service exploiting market niches using technology having lower overhead costs

exploiting market niches

In the context of departmentalization, dividing employees into groups based on where customers are located is known as _____. product departmentalization geographical departmentalization process departmentalization customer departmentalization

geographical departmentalization

When entrepreneurs of small firms start serving a variety of roles, from CEO to customer service rep, such firms: have a large span of control. are able to offer health coverage to their employees at a lower cost than large firms. have lower overhead costs. are able to evade compliance with federal regulations.

have lower overhead costs.

Shelly is a manager in an event management firm. She is admired by all the employees of the firm for her open communication, empathetic behavior, and good leadership skills. In this scenario, Shelly exhibits strong _____. human skills intrapersonal skills life skills cognitive skills

human skills

A _____ is an organization with a flexible structure that brings together specialists from different areas of the organization to work on individual projects on a temporary basis. line organization bureaucratic organization matrix organization traditional organization

matrix organization

Rebecca is a manager in a large publishing house. She and a few other managers do the tactical planning once the strategic plan is prepared. Rebecca is a _____ manager. general middle top-level first-line

middle

Calm Valley Realty, a real estate firm, ensures that it maintains a friendly corporate culture. The firm regularly organizes team lunches and outings where the employees get a chance to expand their network. In the context of Maslow's hierarchy of needs theory, the company is fulfilling the _____ needs of its employees. esteem self-actualization social physiological

social

An advantage of a centralized organization is that it: gives decision-making power to employees at all levels of the organization. tends to have a uniform customer approach across the front lines. is highly responsive to customer needs. typically has a high level of employee morale.

tends to have a uniform customer approach across the front lines.