Entrepreneur Final Exam

Part-time entrepreneurship has an additional advantage over starting up a company full-time in that: a) it is much lower risk for the entrepreneur b) it doesn't require a business plan c) the entrepreneur can change products and market more easily d) the entrepreneur doesn't need to know the industry as well

a

Partnerships have a number of advantages over other forms of ownership , such as: a) a larger pool of capital and little government regulation b) very easy liquidation of owners' investment c) limited liability for all partners d) they may be easily formed by an individual

a

Shares the corporation itself owns are called: a)treasury stock b) common stock c) preferred stock d) bonds

a

Territorial protection in franchising a) varies according to industry b) is basically every franchisee for him/herself c) is absolute and uniform across industries d) is no loner an issue for most franchisees

a

The Uniform Partnership Act outlines a number of general obligations that partners have such as the obligation to: a) give other partners complete information about all business affairs b) share in the management and operation of the business c) be compensated for personal expenses incurred d) have access to the business's books and records

a

The ______ brain processes information in a step-by-step fashion a) left b) right c) front d) back

a

The corporate form of ownership has a significant advantage in that: a) it is easy to transfer ownership b) it has a lower tax rate than either partnerships or sole proprietorships c) there is little cost to its formation d) there is little regulatory oversight by the government

a

The most efficient method of franchising, from the franchiser's point-of-view, which has become popular in the 1990s and permits one franchisee to hold several franchises from the same franchise company, is called: a) multiple-unit franchising b) master franchising c) conversion franchising d) piggybacking

a

The most popular form of business ownership is the: a)sole proprietorship b) partnership c) corporation d) s-corporation

a

The payment the franchisee makes to the franchiser based on gross sales is: a) the royalty b) the start-up fee c) a technical assistance fee d) a national advertising fee

a

The voice of a _____ can be an important source of creative ideas. a)customer b) competitors c) operator d) manager

a

Surveys show that owners of small businesses believe that: A) they work harder on their own than if they worked for someone else B) they earn less than if they worked for someone else C) they are less satisfied than if they workout for someone else D) venture capital is relatively easy to raise

A

The nation is rapidly moving from: A) Industrial to capitalism B) capitalism to industry C) Industrial to knowledge-based D) none of the above

C

Entrepreneurs seem to be characterized by: A) a desire for money B) an inability to organize but strong conceptual skills C) a desire to work alone because of weak management skills and a need for control D) a high-energy level

D

This form of ownership is the same as a corporation in terms of legal characteristics even though Congress is considering legislation that would further simplify its formation and running. Its distinction from a corporation is made for federal income tax purposes only. a) S-corporation b) master limited partnership c) sole proprietorship d) limited liability company

a

When buying a franchise, the potential franchisee should first: a) search for start-up capital for local banks b) evaluate him/herself as to the fit with the franchise c) work in a similar business or industry for a year d) contract the local chamber of commerce for information on the local economy

b

When it comes to financial assistance for franchisees, the franchiser may: a) provide direct financing b) assist in finding financing and occasionally provide direct assistance in a specific area c) waive loyalty fees for franchisees not making an adequate profit d) do nothing, as finding financing is a requirement for qualifying for a franchise

b

One advantage of buying an existing business is a) you always get the best location b) the opportunity to participate in a national advertising campaign c) equipment is installed and production capacity is known d) easy implementation of innovations and changes from past policies

c

Rather than attempting to serve the total market, the small firm pursuing a ______ strategy specializes in serving a specific target segment a) cost leadership b) differentiation c) focus d) head-to-head

c

Ricardo disapproves of an advertising campaign featuring scantily clad models in suggestive poses with his company's product. Ricardo is practicing _____ ethical management. a) immoral b) amoral c) moral d) socially irresponsible

c

Small firms pursuing a cost-leadership strategy have an advantage in reaching customers whose primary purchase criterion is a) quality b) constant innovation c) price d) customer service

c

The _____ is the most complex form of ownership and is a separate legal entity in the eyes of the law a) sole proprietorship b) partnership c) corporation d) joint venture

c

The ______ is (are) a set of measure unique to the company that gives managers a quick and comprehensive view of how the business is doing and includes both financial and operational factors a) core competencies b) key success factors c) balanced scorecard d) action

c

The _______ is a document that states in writing all of the terms of operation a business among the partners a) sole proprietorship agreement b) articles of corporations c) partnership agreement d) limited liability corporation agreement

c

The biggest challenge facing the growth of new franchisees is: a) the lack of capital b) competition from independent entrepreneurs c) market saturation d) the recent downturn in the economy

c

The first step an entrepreneur should take when acquiring an existing business is to: a) explore financing options b) prepare a list of potential candidates c) analyze his/her skills, abilities, and interests in an honest self-audit d) contact existing business owners in the area and ask if their companies are for sale

c

The inventory in an existing business: a) is always current and salable b) usually appreciate over time, making the business bargain c) needs to be checked for age and salability d) is unusually stated honestly and does not need independent auditing

c

These are products of the interaction of various forces, trends, and events that are outside the control of the small business a) distinctive competencies b) key success factors c) opportunities and threats d) strengths and weaknesses

c

To be effective, core competencies should be ________ for competitors to duplicate, and they must provide customers with a valuable perceived benefit. a) easy b) moderate c) difficult d) none of the above

c

Which of the following generally is not required by a Certificate of Incorporation? a) the names and the addresses of the incorporators b) a statement of the corporation;s purpose c) a statement of how stock proceeds will be used d) the corporation's bylaws

c

The franchiser has the right to cancel a contract if a franchisee: a) declares a bankruptcy b) fails to make required payment on time c) fails to maintain quality standards d) all of the above

d

forces driving the entrepreneurial trend in our economy include which of the following? a) technological advancement b) shift to a service economy c) e-commerce d) all of the above

d

small businesses have a number of responsibilities to their investors including: a) selling a high-quality product at a reasonable price b) observing all go government requirements for product manufacture c) earning the lowest profits at the highest cost of production d) providing an attractive return on their investment

d

Tysons Foods' practices of adding value to its chicken products by deboning, skinning, bite-sizing and pre-cooking them in an example of a: a) cost leadership strategy b) differentiation strategy c) focus strategy d) concentration strategy

b

U.S. economic structure is moving: a) away from an agricultural economy to an industrial economy b) away from an industrial economy to a knowledge-based one c) back to an agricultural economy d) away from an agricultural economy to a knowledge-based one

b

A ________ organization sues its revenues to pursue social value rather than create personal value for investors. a) business b) nonprofit c) venture d) corporate

b

A corporation doing business in the state in which it is incorporated is considered to be a(n) _______ corporation. a) alien b) domestic c) foreign d) local

b

A distinct disadvantage of the corporate form of ownership is: a) treasury stock b) double taxation c) stockholder's liability d) all of the above

b

A limited partnership is a modification of a(n) _____ form of ownership a) sole proprietorship b) general partnership c) corporation d) S-corporation

b

A small business owner would conduct a competitive analysis in order to: a) influence customers' perceptions of the company and product's image b) avoid surprises from existing competitors and to identify potential new competitors c) divide the market into smaller, homogeneous units d) scan the environment for weaknesses and strengths on which to capitalize

b

A small business's "aggregation of factors that sets it apart from its competitors" is its: a) strategic plan b) competitive advantage c) vision d) mission

b

Business ethics consists of: a) the legal state that is embodied in the employment manual and policy and procedures b) the fundamental moral values and behavioral standards that form the foundation for the people of an organization as they make decisions and interact with stakeholders c) the fundamental moral values and behaviors specifically for employees only d) none of the above

b

Corporations can also stimulate managers' and employees' incentive on the job by creating an ______ (ESOP) a) entrepreneur stock ownership plan b) employee stock ownership plan c) employee shares ownership plan d) entrepreneur shares ownership plan

b

In franchising, a ______ pays fees and royalties to a _____ in return for the right to sell its products or services under the franchiser's trade name and often to use its business format and system a) franchiser; franchisee b) franchisee; franchiser c) franchise; business owner d) business owner, parent company

b

Mary and Ted are discussing starting a new business and are asking themselves a series of question like; "what is the worst that could happen if we fail?""how likely is that to happen?" They are assessing which potential drawback of small business ownership? a) the long hours and hard work involved b) the risk of losing their entire investment c) the lower quality of life they'll experience d) the uncertainty of their income

b

On the creative process, ____ occurs while the individual is away from the problem, often engaging in some totally unrelated activity a) investigation b) incubation c) transformation d) verification

b

The _____ requires all franchisers to disclose detailed information on their operations at the first personal meeting or at least fourteen days before a franchise contract is signed or any money is paid a) FCC b) FDD c) Trade Regulations Rule d) FDA

b

The ______ environment in which people work has an impact on their level of creativity a) logical b) physical c) national d) all of the above

b

The ________ codifies the body of law dealing with partnerships in the United States. a) small business partnership agreement b) uniform partnership act (UPA) c) partnership agreement d) none of the above

b

A significant advantage of franchisee has over the independent small business owner is participation in the franchiser's _______. a) centralized and large-volume buying power b) social gathering c) profits d) policies

a

Accounts receivable in an existing business a) are rarely worth their face value b) unlike inventory, are often worth their face value c) appreciate over time due to interest and penalties d) are not a significant consideration when buying an existing business

a

More businesses fail because of __________ than for any other reason a) incompetent management b) theft by employees c) insufficient capital d) poor choice of location

a

When buying an existing business, the potential buyer should remember that: a) it is a long process and the buyer should be patient b) existing businesses often do not continue to be successful after a change in ownership c) it is often more difficult to find capital for an existing business than it is for a start-up d) he/she will likely have to make significant changes in the work force

a

When negotiating the deal, the most important thing to remember is: a) terms can be more important than the price paid b) to negotiate the lowest possible price c) often the difference in available funds can be made up by collecting accounts payable d) the owner of the business always asks 1-22% more than he/she is willing to take

a

Which form of ownership is the least costly to form? a) sole proprietorship b) corporation c) partnership d) limited liability corporation

a

Which of the following should make a potential franchisee suspicious about a franchiser's honesty? a) claims that the franchise contract is a standard one and that there's no need to reach it b) an offer of direct financing of a specific element of the franchise package c) not providing detailed operational information until 30 days before signing the contract d) requiring franchisees to spend a certain percentage on the local economy

a

_____ are positive internal factors that contribute towards accomplishing the company's objectives. a) strengths b) weaknesses c) opportunities d) threats

a

______ are a unique set of capabilities that a company develops in key areas, such as superior quality, customer service, innovation, team-building. flexibility, speed, responsiveness, and others that allow it to vault past competitors a) core competencies b) focus strategy c) cost leadership strategy d) none of the above

a

once a manager recognizes the ethical dimensions involved in a dilemma or decision, his/her next step in establishing a workable ethical framework to guide him/her would be to: a) identify key stakeholder and assess how the decision will effect them b) generate alternative choices c) distinguish between ethical and unethical responses to the situation d) determine who is most responsible for making and implementing the decision

a

one key to success to sustaining a business startup is to begin with enough _________. a) capital b) sales c) accounts payable d) suppliers

a

the key ingredient - the most crucial element - to avoiding the failure of a new business a) the business plan b) knowing the business c) technical expertise regarding the product d) differentiating the business and product from the competition

a

the most critical disadvantage of the sole proprietorship is: a) unlimited personal liability b) limited access to capital c) lack of continuity d) limited skills and capacities of the owner

a

which one of the following is NOT a small business innovation enabler, according to Intuit? a) compassion b) customer connection c) agility and adaptation d) all are enablers

a

Which of the following is a way to smooth the transition of leadership/ management from the seller of a business to the buyer? a) focus on the customer, offer new incentives, improve customer service b) focus on the employees, listen to them, keep them informed c) concentrate on operations, updating equipment and changing processes d) visit your competitors and introduce yourself and get to know them

b

Which of the following is not a common characteristic of entrepreneurs? a) desire for responsibility b) business plan expertise c) preference for moderate risk d) high energy level

b

_____ is (are) the fuel that drive(s) creativity a) rules b) imagination c) conformity d) rigidity

b

______ is (are) creditors' claims against an existing business a) assets b) liens c) equity d) accounts receivable

b

_______ are specific measurable targets to be accomplished in a defined time period a) core competencies b) objectives c) opportunities d) key success factors

b

_______ focuses everyone's attention and efforts on the same future goals. It is an expression of what the owner believes the company can achieve by a specific point in time a) the mission statement b) the company vision c) the strategic plan d) the operational plan

b

complementary skills refers to: a) the sole proprietorship skills b) partner's skills that complement one another c) complementary skills offered by the employees d) none of the above

b

if the small business owner wants to demonstrate that the company is serious about its responsibility toward employees, he/she should: a) focus on creating the maximum return on investment b) listen to employees and involve them in decision making c) begin a reengineering effort to improve productivity d) decrease the cultural diversity in his/her company

b

the key to choosing the "right" form of ownership is: a) knowing the cost factor in time and money b) understanding how each form affects both business and your personal circumstances c) having an experienced attorney and accountant to advise you in your choice d) the fact you cannot change the form of ownership once your company is established

b

If the firm owns any trademarks, patents, or copyrights, or has built up a positive reputation with customers and suppliers, the business has what is/are called: a) capital b) goodwill c) intangible assets d) market potential

c

Innovative companies do NOT take a(n)______ approach to creativity a) proactive b) active c) passive d) all of the above

c

A _______ is a written statement of the standards of behavior and ethical principles a company expects from its employees. a) fidelity b) promise-keeping c) code of ethics d) company credo

c

A limited liability company is formed under: a) a certificate of incorporation b) a partnership agreement c) Articles of Organization d) the Revised Uniform Partnership Act

c

A significant disadvantage of partnership is: a) the unlimited personal liability for all partners b) the inability to attract either additional capital or new partners due to the complexity of rewriting the agreement c) the difficulty of disposing a partnership interest without dissolving the partnership d) the regulatory complexity under which a partnership must be formed and operated

c

Common ownership interest in a business, sharing profits (or losses) of a business, and the right to participate in managing the operation of the business are characteristics of a (n): a) corporation b) sole proprietorship c) partnership d) s-corporation

c

Despite all the benefits, there are a number of disadvantages to franchises, such as: a) the time consumed by the management training and support the franchiser provides b) the cost of national advertising c) strict adherence to standardized operations d) territory limitations

c

If a manager is made aware of a sexual harassment problem, he/she should: a) immediately fire the person accused of the harassment b) ask the complainant to approach the harasser and try to work it out c) listen carefully and investigate quickly and thoroughly d) make all and any findings public to protect all parties

c

Which of the following is true about the content of a standard partnership agreement? a) it does not specify how profits and losses will be distributed b) it includes the Certificate of Incorporation c) it specifies how the partnership may be dissolved and assets divided d) while it specifies the location of the business and its purpose, it does not name the partners or their legal addresses to maintain privacy for the partners

c

________ have shares that are controlled by a relatively small number of people, often family members, relatives, or friends a) international partnerships b) publicly traded corporations c) closely held corporation d) privately held corporations

c

_________ partners are not active in a business but generally are known to be members of the partnership. a) dormant b) general c) silent d) limited

c

drawbacks of owning a small business include all except: a) unbalance family life b) no guarantee that the business would make profits c) too many financial statements d) both A and B

c

launching and running a business can be an extremely rewarding experience, but it also can: a) be easy b) bring a steady paycheck c) be stressful d) not be rewarding at all

c

Another term for cobranding franchising is: a) master franchising b) conversion franchising c) multiple-unit franchising d) piggybacking

d

Corporations that are formed in other countries but do business in the United States are: a) international partnerships b) domestic corporations c) foreign corporations d) alien corporations

d

Focusing too much effort on being logical also discourages the use of one of the mind's most powerful creations: ________. a) rationality b) rigidity c) credibility d) intuition

d

Innovation is ______ when it creates market-changing, disruptive breakthroughs that are the result of generating something from nothing a) mandatory b) perfunctory c) evolutionary d) revolutionary

d

Strategic management is a process that involves: a) developing a vendor list b) developing a vision and mission statement c) developing goals and objectives d) both B and C

d

The strategic management process: a) is especially easy for the small business because of its vase resources b) divides mass market into smaller, less homogeneous units c) provides the small business owner with the tools for managing the uncontrollable elements in the external business environment d) helps a small business develop the game plan that guides it in creating its mission, vision, goals and objectives

d

When buying an existing business, one should remember that: a) it is generally not important to independently evaluate the inventory b) you are always buying goodwill with the tangible assets of the business c) it is as easy to make change in an existing business as it is in a start-up d) the real reason for selling is seldom stated honestly

d

When the small business owner assesses her company's strengths and weaknesses, she is dealing with the ____ business environment a) macro b) external c) competitive d) internal

d

When translating strategic plans into action plans, the small business owner should: a) not delegate authority or responsibility at this point b) not assign priorities to the action plans, but manage the process from the conceptual level c) not adjust or change the plan but commit to implementing as it stands d) remember that no strategic plan is complete until it's put into action

d

______ is not a primary goal of a competitive intelligence program. a) avoiding surprises from existing competitors' new strategies and tactics b) identifying potential new competitors c) improving reaction time to competitors' actions d) all these are primary goals of a competitive intelligence program

d

______ thinking is narrowly focused and limited by the status quo. a) flexible b) intuitive c) creative d) myopic

d

_______ is the ability to develop new ideas and to discover new ways of looking at problems and opportunities a) showboating b) commoditizing c) operational planning d) creativity

d

________ are negative external forces that inhibit the firm's ability to achieve its objectives. a) strengths b) weaknesses c) opportunities d) threats

d

________ is the ability to apply creative solutions to problems and opportunities to enhance or to enrich peoples lives a) showboating b) commoditizing c) creativity d) innovation

d

_____thinking is the ability to see the similarities and the connections among various and often diverse data and events a) divergent b) parallel c) investigative d) convergent

d