Entrepreneurship Midterm 2

Equity capital is paid back within one year. paid back after five years. not a loan but a form of stock. a loan from family.

not a loan but a form of stock

An association of two or more persons who act as co-owners of a business for profit is called a...

partnership

Projections of a firm's financial position during a future period or on a future date are called...

pro forma statements

Which of the following is an example of an intangible asset? reputation inventory plant facility machiner

reputation

This analysis points out the importance of getting an adequate return on the amount of money risked is called...

risk versus reward

Liabilities that must be paid during the coming 12 months are called...

short-term liabilities

A hybrid form of business enterprise that offers the limited liability of a corporation but the tax advantages of a partnership is called...

the limited liability company (LLC)

A technique that helps to minimize some of the short-comings of the payback method by recognizing the future cash flows beyond the payback period is called...

the net present value (NPV) method

The profits the business can make and the losses it can suffer is called...

upside gain and downside loss

Claims of the business against its customers for unpaid balances from the sale of merchandise or the performance of services is called...

accounts receivable

A market is a segment of the economy. way of gaining consumer data. group of consumers who have purchasing power and unsatisfied needs. group of known purchasers.

group of consumers who have purchasing power and unsatisfied needs.

The text discusses all of the following important guidelines to follow when putting the plan together except keeping the plan respectably short. highlighting critical risks. avoiding exaggeration. impressing with excessive detail.

impressing with excessive detail.

A financial statement that shows the change that has occurred in a firm's position as a result of its operations over a specific period is called...

income statements

An indicator of the planning pitfall of "no realistic goals" is lack of timetable to accomplish things. missed appointments. excessive procrastination. lack of desire to invest personal money.

lack of timetable to accomplish things.

The process of identifying a specific set of characteristics that differentiates one group of consumers from the rest is called...

market segmentation

Competitive analysis, advertising plan, and pricing policy are all part of the _____ segment. research, design, and development marketing milestone schedule financial plan

marketing

A patent gives the holder a temporary profit. oligopoly. monopoly. specification.

monopoly.

Short-term financing that involves either the pledge of receivables as collateral for a loan or the sale of receivables (factoring) is called...

accounts receivable financing

The social and economic environment affecting the local and regional entrepreneurship is called...

an entrepreneurial ecosystem

Organizations that offer a range of support services and funding opportunities for new ventures are called...

business accelerators

Professionals specializing in business opportunities often can provide leads and assistance in finding a venture for sale. They are called...

business brokers

Which of the following would be characterized as a "weakness" in SWOT to a new/small oil refinery venture? A high cash burn rate Strong, positive relationships with the customer segment A societal trend towards alternative energy that does not use oil New legislation giving small refineries preferred access to land thought to contain a considerable volume of oil

A high cash burn rate

The practice seeks funding for ventures by raising monetary contributions from a large number of people, typically via the internet. It is called...

crowdfunding

Effective marketing is based on three key elements: marketing philosophy, market segmentation, and guerilla tactics. (True/False)

False

In SWOT terminology "opportunities" are things that the venture does well. (True/False)

False

It is usually more expensive to gather secondary data than primary data. (True/False)

False

Planning is not essential to the success of an undertaking. (True/False)

False

Pricing procedures are the same for all types of ventures. (True/False)

False

Pro forma statements show the firm's present financial position. (True/False)

False

Sales records are of very little value to a buyer in evaluating a company's worth. (True/False)

False

Skimming is setting prices at such a low level that products are sold at a loss. (True/False)

False

The patent process is neither complex nor does it require careful planning. (True/False)

False

The role of the customer in social media marketing is as an external source of intelligence and feedback. (True/False)

False

Which of the following statements about the marketing skills of great entrepreneurs is true? They have no fears. They demonstrate persistence in their strategies. They are inattentive to details, focusing continually on the big picture. They have a clear vision of what they want to achieve next.

They have a clear vision of what they want to achieve next.

In purchasing an existing business, one of the first questions should be: "Why are you selling?" (True/False)

True

Informal risk capitalists are those who have already made their money and now seek to help new ventures. (True/False)

True

Marketing information that has already been compiled is known as secondary data. (True/False)

True

Marketing planning is the process of determining a clear, comprehensive approach to the creation of customers. (True/False)

True

Marketing research involves the gathering of information about a particular market, followed by analysis of the information. (True/False)

True

One of the principal advantages of a corporation is that the stockholder's liability (the most money a person can lose) is limited to an individual's investment. (True/False)

True

The cash-flow budget provides an overview of cash inflows and outflows for the budget period. (True/False)

True

Trade credit is given by suppliers who sell goods on account. (True/False)

True

Any arrangement in which the owner of a trademark, trade name, or copyright has licensed others to use it in selling goods or services is called...

a franchise

The seller of the franchise is called..

a franchisor

A group of consumers who have purchasing power and unsatisfied needs is called...

a market

A business that is owned and operated by one person is called...

a sole proprietorship

More established ventures will use a sales forecast model where the estimation of current sales will increase a certain percentage over the prior period's sales. This percentage is based upon newly established sales only. an inventory analysis. a trend line analysis. past experience.

a trend line analysis.

Wealthy individuals who invest more or less regularly in new and early- and late-stage ventures are called...

sophisticated investors

Credit given by suppliers who sell goods on account is called...

trade credit

Contribution margin is the difference between the selling price and the fixed cost per unit. (True/False)

False

Copyrights have to be registered with the Copyright Office. (True/False)

False

A lack of demonstrated experience, no clear market niche, a failure to anticipate roadblocks, no realistic goals set, and a lack of commitment are all potential pitfalls or common points of failure that can occur before an entrepreneur even gets a plan reviewed. (True/False)

True

An entrepreneur is much better off preparing his or her own business plan rather than hiring someone else, even if more experienced, to prepare it. (True/False)

True

An investment prospectus is the same as a business plan. (True/False)

True

Break-even analysis is used to tell how many units must be sold in order to break even at a particular selling price. (True/False)

True

A financial statement that reports a business's financial position at a specific time is called...

a balance sheet

An entity that helps new ventures to develop by providing services such as management training and office space is called...

a business incubator

A purchaser of a franchise is called...

a franchisee

The major thrust of the business plan, as defined in the textbook, is to provide a working document for the venture. encapsulate the strategic development of the project in a comprehensive document. serve as a communication tool for the entrepreneur. outline capital needs for the new venture.

encapsulate the strategic development of the project in a comprehensive document.

Money invested in the venture with no legal obligation for entrepreneurs to repay the principal amount or pay interest on it is called...

equity financing

The final critical factor in the marketing planning process is evaluation. sales forecasting. cost projection. analysis.

evaluation

The sale of accounts receivable is called...

factoring

Asset-based lenders that lend money against assets such as receivables, inventory, and equipment are called...

finance companies

The extra value a business can command in a sale is known as goodwill. saleable value. market value. asset value.

goodwill

The value of the company beyond what is shown on the books is called...

goodwill

Sometimes consumers associate a higher price with supply interruptions. product complexity. higher product quality. discounted cash flows.

higher product quality

The registered public offering of a company's securities for the first time is called...

initial public offering (IPO)

When starting a business, which of the following sources of financing is least likely to be used? trade credit factors leasing companies insurance companies

insurance companies

Which of the following would be most commonly used for intermediate-term financing? insurance companies trade credit mutual savings banks leasing companies

leasing companies

An agreement not to compete is also known as a trade restriction clause. legal restraint of trade. waiver of competition clause. deferential sale of business clause.

legal restraint of trade

An attorney writes into the contract an agreement that the previous owner will refrain from conducting the same business within a reasonable distance for a period of at least five years. This is known as...

legal restraint of trade

When the debtor is required to surrender all property to a trustee appointed by the court, it's called...

liquidation

Liabilities that are not due and payable within the next 12 months, such as a mortgage on a building or a five-year bank loan are called...

long-term liabilities

Which of the following can provide a structure that facilitates investments in socially beneficial, for-profit ventures? S corporation low-profit, limited liability company (L3C) or Benefit Corporation limited partnership limited liability partnership

low-profit, limited liability company (L3C) or Benefit Corporation

Skimming is setting the price to switch customers to new product lines. match the competition. maximize profit. maximize market share.

maximize profit

Indicates the importance of people's awareness of their daily lives (work and free time) for developing new business ideas is called...

new-new approach

An individual "piggy-backs" on someone else's idea by either improving a product or offering a service in an area in which it is not currently available is called...

new-old approach

Which of the following survey methods has the lowest response rate? Internet surveys personal interviews, door to door phone interviews mail surveys

personal interviews, door to door

Which of the following is not a key factor affecting a marketing information system? usefulness or understandability of data data relevancy size of the system system cost

size of the system