Chapter 5 thru 7 exam

What are the 6 main barriers to effective communication? Which barriers are easiest to surmount? Why?

-physical barriers -body language barriers -perceptual barriers -organizational barriers -cultural barriers

What are the key contributions of small business to the U.S. economy? Rank the benefits in terms of importance, and provide the reasons for your ranking.

. Creating new jobs: Small businesses with employees generate about 70% of the new jobs in today's economy. Fueling innovation: Small businesses develop innovations at about twice the rate of their large business counterparts. Vitalizing inner cities: Small businesses comprise more than 99% of inner city establishments, providing a springboard for development

Which of the following is a difference between a C corporation and an S corporation?

A C corporation is double taxed, whereas an S corporation is taxed as a partnership.

In the context of entrepreneurs, which of the following statements is a difference between an internal locus of control and an external locus of control?

An internal locus of control involves personal responsibility, whereas an external locus of control does not.

The most common type of corporation is an S corporation.

False

Neman, a single parent, quit his job and started a small independent business because he was unable to give adequate attention to his child. Being an entrepreneur gives him the freedom to give undivided attention to his child without jeopardizing his work. Which of the following advantages of entrepreneurship is highlighted in the given scenario?

Flexibility

Which of the following is a recommended practice to avoid race or ethnicity bias?

Forgo any references to race or ethnicity.

In the context of becoming a successful small business owner, which of the following is a good rule to follow?

Getting roughly three years of experience working for someone else in the field that interests you

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

Which of the following is a disadvantage of franchising?

The franchise agreement usually requires the franchisee to follow the franchiser's procedures to the letter.

What steps are involved in forming a C corporation?

The steps involved in forming a C corporation are filing articles of incorporation and pay filing fees. It also requires adopting corporate bylaws, which are detailed rules that govern the way the corporation is organized and managed. The requirements vary among the states. Some states are known for their simple forms, inexpensive fees, low corporate tax rates, and "corporation-friendly" laws and court systems, making forming a corporation not much harder or more expensive than a sole proprietorship.

In a business presentation, which of the following actions is likely to increase your credibility and persuasiveness?

Using expert quotations during the presentation

Which of the following funding options provides advice and guidance to start-up businesses along with the funds? Group of answer choices

Venture capital

Which of the following is an advantage of starting a business from scratch?

You do not have to deal with a prior owner's bad decisions.

What factors should you consider when you choose a communication channel for your messages? Should you always use the richest channel? Why or why not?

You should consider the content of the message, the audience, and size and location of the audience . And the richest channel is not always the best way to send a message. For example, you may send a email and people may read what you wrote and take your message in the wrong way.

A Franchise Disclosure Document (FDD) is:

a document provided by a franchiser to the franchisee.

As a communication channel, _____ has the highest level of channel richness and is used when the message to be communicated is personal, emotional, or high-priority.

a face-to-face meeting

A sole proprietorship is a form of business ownership in which:

a single owner actively manages the company.

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

corporation

A _____ refers to a partnership in which all partners can take an active role in managing the business and have unlimited liability for any claims against the firm.

general partnership

If you encounter a hostile questioner while giving a presentation, you should avoid: Group of answer choices

reestablishing eye contact once you have answered the question.

All owners of a _____ can actively participate in management while still having limited liability.

statutory close corporation

In the context of an acquisition, the firm that is purchased by another firm is called the _____.

target firm

Review the benefits an entrepreneur might seek in starting a new business. Which benefits are most appealing to you? Why?

the key benefits that entrepreneurs might seek in launching a new business are a greater financial success, maybe some independence / flexibility.

An advantage of franchising is the:

training and support provided by the franchiser.

To strike the right tone while writing a business message, it is suggested that an individual:

uses the active voice to facilitate concise communication.

Nestor wants to open a new event management company. Deveon, a multinational company, agrees to fund his business on the condition that Deveon be given 50% ownership in the company. In the given scenario, Deveon is most likely a(n) _____. Group of answer choices

venture capital firm

A large film production company merges with a popular sound processing studio, resulting in the formation of a new company out of the two previously independent firms. This is most likely an example of a _____.

vertical merger

Which of the following statements avoids gender bias?

A manager who does not lead by example is a poor manager.

Which of the following is an example of an institutional investor?

A mutual fund

How do limited partnerships and limited liability partnerships differ from general partnerships and from each other?

A sole proprietorship is a business that is owned and usually managed by a single individual. It is the simplest and least expensive form of ownership to establish. The sole proprietorship is considered to be an extension of the owner. The owner has unlimited liability for the debts of the proprietorship. A general partnership is an agreement between two or more individuals to co-own and operate a business. Each general partner has the right to participate in the management of the partnership, and to share in the company's profits (or losses).Each partner also has unlimited liability for the debts of the company A C corporation is a legal entity that is considered separate and distinct from its owners. A corporation is like an artificial person; it can own property, enter into contracts, and initiate legal actions (such as lawsuits) in its own name. It is created by filing a form, usually called the articles of incorporation, and paying an incorporation fee to the appropriate agency in the state of incorporation. Ownership of a corporation is represented by shares of stock, so its owners are called stockholders (or shareholders). Unlike sole proprietors and general partners, stockholders are not liable for the debts of their company. A limited liability company (LLC) is a hybrid form of business ownership that is similar in some respects to a partnership while having other characteristics that are similar to a corporation. Like a corporation, a limited liability company is considered a legal entity separate from its owners. Also like a corporation-and as its name implies--an LLC offers its owners limited liability for the debts of their business. But it is subject to fewer regulations and has more flexible tax treatment than a corporation; in fact, one of the most interesting characteristics of an LLC is that its owners can elect to have their business taxed either as a corporation or a partnership

_____ is a deep-seated sense that forces other than the individual are responsible for what happens in his or her life.

An external locus of control

In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?

Angel investors are wealthy individuals, whereas venture capital firms are companies.

Which of the following is a similarity between a general partner and a limited partner in a limited partnership?

Both contribute financially to the company.

Beyond personal resources, what are other funding options for small businesses? Why don't more entrepreneurs tap into these resources?

By taking out a loan from the bank or angel investors. They don't tap into these resources because they lack the track records that many investors require.

Which of the following practices is recommended for an effective business presentation?

Citing trusted sources, specific data, and expert quotations

In the context of American culture, which of the following will be a benefit of eliminating negative age bias in hiring?

Companies will get a broader applicant pool.

_____ is the process of funding ventures by raising money from a large number of investors via the Internet.

Crowdfunding

Which of the following is an issue associated with general partnerships?

Difficulty faced by a partner when withdrawing from the company

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.

Communication must be static and one-way rather than dynamic and two-way.

False

Which of the following is a threat that a small business is most likely to face?

High risk of failure

Which of the following is a drawback of buying a franchise? Group of answer choices

If the national brand suffers, so does the business.

Which of the following is a recommended practice for picking the right words for business communication?

Including all information that the audience may need

In the context of creating and delivering successful verbal presentations, which of the following statements is true of dynamic delivery?

It begins and ends with preparation.

Which of the following statements is true of a limited liability partnership (LLP)?

It does not need to distinguish between limited and general partners.

Which of the following statements is true of a limited liability company (LLC)?

It is a relatively new form of business ownership in the United States.

Which of the following statements is true of a business plan? Group of answer choices

It is absolutely crucial for obtaining outside funding.

In the context of franchising, which of the following statements is true of a business format franchise?

It is an agreement in which franchiser grants the franchisee the right to both make and sell its good or service.

Which of the following statements is true of starting a business from scratch? Group of answer choices

It is hard to get credit from both lenders and suppliers.

Which of the following is a challenge faced by a franchisor?

Keeping all the franchisees satisfied

Compare the opportunities and threats that small businesses face. Which opportunities are most compelling? Which threats are most intimidating? Why

Market niches: Because of their size, many small firms are uniquely positioned to exploit small but profitable corners of the market • Personal customer service: With a small customer base, small firms can develop much more personal relationships with individual customers. Lower overhead costs: With entrepreneurs wearing so many hats, many small firms have lower overhead costs. Technology: The Internet has played a powerful role in opening new opportunities for small businesses. Threats: High risk of failure: Starting a new business involves a lot of risk,especially in the first five years. • Lack of knowledge and experience: Entrepreneurs often have in-depth knowledge in a specific areas, but lack expertise in running a business. • Too little money: Lack of sufficient start-up money is a major issue for most new firms. • Bigger regulatory burden: Complying with federal regulations can be an overwhelming challenge for small firms. • Higher health insurance costs: The costs for small health plans are much higher, making it tough to offer the coverage that top employees expect

Which of the following communication channels should ideally be used when you must communicate lengthy or detailed uncontroversial information? Group of answer choices

Memos

Why is nonverbal communication so important? How can you tell when nonverbal communication is effective?

Non-verbal communication is important because it contributes a lot to the meaning of the messages we convey; 38% of the meaning comes from the voice, and 55% of the meaning comes from the 's body language such as facial expressions, gestures, and posture.Nonverbal communication is effective when it supports the verbal component of the message.

When giving a business presentation, which of the following practices is likely to alienate the audience?

Not having more than three or four key points

In the context of business communication, when writing high-impact messages, it is:

OK to begin sentences with "And" or "But."

Which of the following categories of people is most likely to step into entrepreneurship?

People who have trouble being subordinates because of their personalities

Which of the following is a disadvantage associated with sole proprietorship's?

Raising money to finance growth can be tough for business owners.

Which of the following statements is true of business emails?

Response to emails should be as prompt as possible.

Which of the following is an advantage associated with a sole proprietorship?

Retention of control

Which of the following is an advantage of a C corporation?

Shareholders have limited liability in the firm.

Which of the following practices should ideally be followed when giving a business presentation?

Telling the audience the key points before launching into the body of the presentation

Which of the following is an appealing benefit that entrepreneurs enjoy?

The ability to set their own hours

Describe the basic features that distinguish the four basic forms of business ownership: sole proprietorship's, general partnerships, C corporations, and limited liability companies.

There are four basic forms of business ownership that each have different basic features. Sole proprietorship's are a form of business ownership has a single owner who usually actively manages the company. They have one owner, the proprietor typical manages the company, the owner has unlimited liability, they are taxed only as income to the owner, and they have no special filing required with the state. General partnerships are a partnership in which all partners can take an active role in managing the business and have unlimited liability for any claims against the firm. They have two or more owners, all general partners have the right to participate in management, the owners have unlimited liability, they are taxed only as income to the owners, and there are no special filing required with the state. C corporations are the most common type of corporation, which is a legal business entity that offers limited liability to all of its owners, who are called stockholders. They have no limit on the number of stockholders, most of the stockholders don't take an active role in management instead they elect a board of directors who set policy/appoint/powerless corporate officers who actively manage the company, the owners have limited liability, their earnings are subject to double taxation meaning they are taxed as income to the corporation and the dividends are taxed as income to the stockholders, and they must file articles of incorporation with the state and pay the filing fee. Limited Liability Companies are a form of business ownership that offers both limited liability to its owners and flexible tax treatment. They have no limit on owners, the owners may be member- or manager-managed, the owners have limited liability, they have the option to be taxed as either a partnership or a corporation, and they must file articles of organization with the state and pay the filing fee.

Which of the following statements is true of cloud computing applications?

They can be accessed without an Internet connection.

Which of the following is an advantage of limited liability companies (LLCs)?

They can have any number of owners.

Which of the following statements is true of forming C corporations?

They require the adoption of corporate bylaws.

In the context of small business opportunities, which of the following statements is true of market niches? Group of answer choices

They tend to be quite attractive to small firms.

Which of the following statements is true of entrepreneurs who possess tolerance of failure?

They tend to view nonsuccess as a chance to learn.

Which of the following is a characteristic of successful entrepreneurs?

Tolerance of uncertainty

Franchising is used by companies to move into foreign markets.

True

One of the disadvantages of general partnerships is the lack of continuity.

True

In the context of funding options for small businesses, the _____ assists entrepreneurs by partially guaranteeing loans from local commercial lenders.

U.S. Small Business Administration

The benefits of a general partnership include its _____.

ability to pool financial resources

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

business plan

When writing a high-impact message, one should:

consider how the audience will feel about the message.

In a sole proprietorship, any debts the company incurs are:

considered to be the owner's personal liabilities.

The basic rules governing how a corporation is organized and how it conducts its business are known as _____.

corporate bylaws

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.

A _____ is a type of franchising arrangement in which the franchisor makes a product and licenses the franchisee to sell it.

distributorship

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.

domestic corporation

The primary reason people choose to become entrepreneurs is to:

earn more money.

To decide the vocabulary and the complexity of a message, one must know the _____ of the audience.

education level

Amanda has always been inclined toward baking and wants to open her own bakery. She takes a loan of $20,000 from the bank and starts a bakery in her hometown. In the context of the four forms of business, Amanda most likely _____.

has a sole proprietorship

Similar to a corporation, all owners of a limited liability company (LLC):

have restricted debts.

Unlike a sole proprietorship, a corporation:

is considered to be a legal entity that is separate and distinct from its owners.

A(n) _____ is a form of business ownership that offers both restricted responsibility to its owners and flexible tax treatment.

limited liability company

Technological tools such as the Internet and email have:

made it easy for small business owners to manage their firms on the go.

Michael is a middle-aged professional who lost his job five months ago when his former employer downsized. He has actively been looking for work ever since but has not been able to find a job that utilizes his abilities or offers an income similar to his previous position. He is beginning to realize that the only way for him to survive his current situation is to start his own business. In this scenario, Michael will most likely become a(n) _____.

necessity entrepreneur

In the context of business communication, one should:

not use slang in either written or verbal communication.

A corporation is a separate entity from its owners where the:

owners are not personally responsible for the obligations of the company.

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

partnership

Julian wants to open a bakery. He uses his savings and borrows some funds from his family to start his business. In the given scenario, Julian uses _____ to fund his business.

personal resources