Entrepreneurship Exam 2

What are the 4C's?

1. Customer solution - what the firm needs to provide to meet the customer's needs and wants. 2. Cost to customer - the total cost of the product including extended guarantees, delivery charges and financing costs. 3. Convenience to customer - providing easily accessible pre-sales info and demonstrations. 4. Communication with customer - providing up-to-date and easily accessible two-way communication links with customers to both promote the product and gain back important consumer market research information.

Which of the following statements regarding sole proprietorship is true

A sole proprietorship is owned and operated by one person

What % of issued patents is considered commercially valuable?

A very small %

______ bank loans are made on a discounted value of the receivables pledged

Accounts receivable financing

Effective marketing is based on three key elements: marketing philosophy, Market segmentation, and consumer philosophy

False

Equity financing is money invested in the venture with legal obligations to repay the principal amount or pay interest on it

False

In the marketing shift from the 4Ps to the 4Cs, price shifts to choice and promotion shifts to communities

False

It is not common for a buyer to be faced with a franchise fee of $250,000 to $1,000,000

False

It often is possible to obtain more capital and a better range of skills in a sole proprietorship than in a partnership

False

Only major strategic decisions need to be supported through market research

False

Pro forma statements show the firms present financial position

False

The entrepreneurs professionalism, and how well he or she handles the venture capitalist is far more important than being well organized and prepared

False

The federal trade commission does not provide information on franchise success

False

The freemium model of requires new and exciting content each month to build a long-term relationship with fee-paying customer

False

The traditional accounting equation is: assets + liabilities = owners equity

False

Vertical analysis is the application of ratio analysis see the many sets of financial statements

False

Which of the following statements about entrepreneurial marketing is not true

In entrepreneurial, marketing actions are constrained by resources currently controlled

Which of the following is the first step in the preparation of the cash flow budget?

Indication of outflows

It's unprofessional areas the business plan is referred to as an

Investment prospectus

A chapter 11 proceeding allows the business to operate as a ________ which means that the court appoints a trustee to oversee the management of the business

Liquidation

A business plan

May help an entrepreneur avoid a project that is doomed from the start

The _______ approach indicates the importance of people's awareness of their daily lives for developing new business ideas.

New-new

Which of the following is a critical factor to be considered in the management segments?

Organizational structure

The person who sells the franchise is usually required to do all of the following except

Pay a fee

It is important that an entrepreneur

Prepare his or her own plan

A business has to increase its sales annually to net as much as it did in the previous year when...

Profits are not rising as fast as sales

Comparing financial numbers in order to make decisions is referred to as

Ratio analysis

The textbook discusses all of the following aspects that distinguish social media marketing from traditional marketing except...

Relevancy

Blueprints, sketches, drawings, and models are often features to be placed in which of the following sections of the business plan

Research, design, development

When using the graphic approach to break even analysis, the entrepreneur should plot, total ____ and total _____

Revenue;cost

SEC:

Securities & Exchange Commission

SBIC:

Small Business Investment Company

Which of the following is not one of the most common methods used in capital budgeting

anticipated change in net income method

penetration pricing is setting the price to

be below competition

Legal protection is granted to computer programs in which of the following forms

copyright

The textbook recommends that social media marketers consider which of the following three aspects of social media when using those tools for marketing purposes

creating, enabling, and encouraging

Because of the _____ doctrine, it is sometimes difficult to establish infringement.

fair use

Which of the following survey methods has the lowest response rate?

mail surveys

Control versus communication is an important distinction between social media marketing and traditional marketing

False

Copying the latest social media craze is an indication of not having realistic goals.

False

Which of the following is a not a question in entrepreneurship be prepared to answer?

What is the price of your product

Capital budgeting is used to help the entrepreneur planned for capital depreciation

False

How many months of the year should be illustrated in the first pro dorms income statement

12

The Franchise Disclosure Document (FDD) contains how many categories?

23

Chapter 13 Bankruptcy involves a reorganization of the enterprise

False

The most common source of debt financing is

Commercial banks

Promotion links to which of the 4Cs of marketing

Communities

The emerging body of law governing cyber space is often referred to as

Cyber law

Which of the following is not a start up expense?

Depreciation

The Franchisee's responsibilities do not include

Designing the product specifics

The most common viewpoint in business plans is the new point of the

Entrepreneur

Break-even analysis is used to access

Expected product profitability

Accounts receivable, turnover measures the rate at which accounts receivable are being collected at a monthly basis

False

An entrepreneur should include a 3 to 5 year financial projection, so that the financial source can adequately evaluate the venture

False

Attorney-hopping is the best way to keep legal fees to a minimum

False

Because the advantages of going public outweigh the disadvantages, it is in corporation's best interest to go public

False

A business plan is the entrepreneurs roadmap to a successful enterprise

True

A business plan should be no more than 150 pages

True

A method of raising capital is through the private placement of securities.

True

After delivering a pitch, it is not acceptable to question venture capitalist, who turned down a funding opportunity

True

An investment prospectus is the same as a business plan

True

Anyone who vialates an authors exclusive rights under a copyright is liable for infringement

True

Crowdfunding provides entrepreneurs with access to beta-testing and market feedback

True

Entrepreneurs who exploit a radical new technology to provide a product and radically disrupt the market through the creation of a new product space represent the highest level of innovation "newness" relative to other alternatives.

True

Generally, the larger and more successful the franchisor, the greater the franchise fee that is charged

True

In negotiating,a deal to purchase an existing business, It is possible to request that the seller retain a minority interest in the firm.

True

Mobile social Media applications can be differentiated based on location-sensitivity as well as on time sensitivity

True

Patents eventually expire

True

The actual cost of "opening the doors" of a franchise establishment can be more than $200,000

True

The cash-flow budget provides an overview of cash inflows and outflows for the banking period

True

The first step in creating an operating budget is to prepare the sales forecast

True

The handling questionable cost approach of break even analysis was specifically designed for firms that have expenses that are difficult to assign

True

The most common source of debt financing are commercial banks

True

The two parts of a patent application are specification and claims

True

When using P2P lending, one potential danger may be an uncertain regulatory environment.

True

Which of the following is not a question commonly asked by Banks of entrepreneurs?

What interest rate did you have in mind?