Entrepreneurship 206
Calculate the NPV of an opportunity with an initial investment of $10,000, and cash inflows of $5,000 in year 1, $3,000 in year 2, and $5,000 in year 3. Your cost of capital is 15%.
$(96.16)
__________ is/are a challenge to a virtual company.
Communication problems
Which of the following is true about cloud computing? (Choose all that apply.)
Data is stored on remote servers. Data is managed on remote servers. Cloud services are often provided for a nominal monthly fee.
__________ is an integrated software solution that incorporates all functions of a business, such as finance, human resources, planning, manufacturing, sales, marketing, customer service, and distribution.
ERP
Which country saw a sharp decline in tourism in 2016?
Egypt
To become an entrepreneur, one must study managerial skills at a college level. True or false?
False
Which of the following is true about complying with the Internal Revenue Service? (Choose all that apply.)
Noncompliance can lead to penalties. Noncompliance can lead to fines.
Which Internet service connects individual borrowers with individual lenders?
Peer to peer lending
Your marketing plan should have one section heading for which of the following?
Product, price, place, and promotion
Businesses consider consumer buying habits when they invest in start-up costs and operational costs. True or false?
Product, price, place, and protection
What kind of costs should entrepreneurs plan for when beginning and running a business? (Choose all that apply.)
Start-up costs Operating costs
Which of the following best describes the inheritance you receive from your rich uncle, which will help to finance your business?
Strength
SWOT analysis stands for which of the following?
Strengths, weaknesses, opportunities, and threats.
Which nonprofit organization ranks entrepreneurship by country every year?
The Global Entrepreneurship Development Institute
Which federal agency handles intellectual property?
The Patent and Trademark Office
Which federal agency offers loan programs for entrepreneurs?
The Small Business Administration
Which index ranks each state according to policies favorable for entrepreneurship?
The Small Business Policy Index
What is an advantage to hiring an advertising agency? (Choose all that apply.)
The agency has more time to devote to your advertising needs. The agency will have more knowledge of skilled resources than the business owner
Which of the following is a characteristic of a strong privacy policy?
The policy explains how to opt out of the agreement with the company.
Which of the following is true about a reliable cloud computing service?
The provider has alternate servers around the country and can reroute data.
Which of the following describes the best reason to use SWOT analysis in creating your marketing plan?
To know who you are and what the marketplace is like
The government will not interfere in an entrepreneur's business unless he or she commits a crime. True or false?
True
To practice responsible business buying, business owners should spend enough on purchases but avoid which of the following?
Waste
Which of the following is true about the content of your website? (Choose all that apply.)
You should control the content. Negative comments can cause people to perceive your company negatively. Blocking people who are harassing online is one way to control content.
Companies outsource because an outside specialist can perform a business function
a and b
Noncompliance of OSHA's health and safety guidelines can result in
a and b
Superior customer service means soliciting customer feedback that is
a and b
The best way to select a supplier and a manufacturer is to
a and b
Traditional retail stores are expensive to operate due to __________.
a and b
When you outsource, you contract out certain business functions to __________.
a and b
Examples of answers to the "who" question include __________. (Choose all that apply.)
a customers over 20 back-to-school shoppers mothers shopping for children's school supplies shoppers from within the town
Considering both the advantages and disadvantages of an ERP, which of the following types of businesses might be a good candidate for installing an ERP?
a large manufacturer, with 30,000 employees in four different countries
A privacy policy is __________.
a written policy
__________ is an item of monetary value that belongs to the company and that contributes to its net value.
an asset
Cost of capital is
an interest rate used to determine the opportunity cost of a specific investment
Which of the following is an example of a C2C business model?
an online auction site
An example of an account receivable is
an unpaid invoice
A good example of a company that uses a broad differentiation business strategy is:
apple
Entrepreneurs prefer to seek market segments that __________.
are not well known
ACH payments are automatic debits from a customer's __________.
b and c
Consumers are defined as
b and c
Consumers are defined as __________.
b and c
Entrepreneurs usually have which level of education when they start their business?
bachelors degree
You record interest on your income statement but record your principal payments on your
balance sheet
Which of the following is a good idea for an entrepreneur who is building a start-up business? (Choose all that apply.)
budgeting for office supplies budgeting a set amount per month for advertising taking out an ad in the local yellow pages
In which part of the business plan do business owners decide on a business's purpose?
business model and strategic plan
Which of the following explains how your business will make money in brief, simple terms?
business models
According to the book The Millionaire Next Door, the wealthiest Americans are primarily
business owners
A good marketing plan will help you revise your __________ plan and also help you specifically predict your __________.
business; budget
How do entrepreneurs benefit an economy?
by creating new goods and services
An organized series of messages that reaches the audience in a similar way is called an advertising __________.
campaign
Entrepreneurs who start lifestyle businesses do so to earn __________ for themselves and their families.
income
Funds not received from you and your business partner can be considered sources of
debt
Funds received from a bank in the form of a loan are considered sources of
debt
The second step in connecting goals with advertising strategy is __________.
developing a strategy for each campaign
Business functions are considered valuable when they are
distinctive rare inimitable
Which of the following may help to reduce the cost associated with hiring an advertising agency? (Choose all that apply.)
doing some of the work in-house yourself agreeing to a project rate
Buying an asset is an example of __________activities
investing
Gross profit minus total operating expenses equals
earnings before interest and taxes (EBIT)
A good is considered nondurable when __________.
it lasts less than three years
A car is an example of a nondurable good. True or false?
false
A long-term asset is an asset that can be converted before 12 months. True or false?
false
A new business should avoid using free or low-cost advertising. True or false?
false
A new business that is opening a website should always include an online forum. True or false?
false
A privacy statement can be effective if it's a verbal agreement. True or false?
false
A virtual company will most likely have an office building. True or false?
false
An ERP system cannot significantly lower cost of goods sold. True or false?
false
Failure to create or abide by a privacy policy does not result in any significant penalty. True or false?
false
George Benson is opening a new pizza place in town. He has just recently learned that the local market does not watch cable TV very much. George should still place an ad on cable because the market may move in that direction. True or false?
false
In order to be considered legal, the privacy policy must use a lot of legal terms. True or false?
false
Interest paid is recorded on the cash flow statement. True or false?
false
It is a bad idea to write a statement of marketing strategy in your business plan. True or false?
false
It's always permissible to sell or share customer information. True or false?
false
Meetings conducted by entrepreneurs should not allow discussion of new ideas. True or false?
false
One advantage of an ERP system is the complexity. True or false?
false
One of the disadvantages to having an ERP system is that it cannot provide a standardized method of tracking employee performance. True or false?
false
One way to overcome weaknesses in your new business venture is to pursue multiple opportunities at the same time. True or false?
false
Quality control and quality assurance are the same thing. True or false?
false
Quality control has become the preferred model of quality management. True or false?
false
Saudi Arabia is nicknamed the Start-Up Nation. True or false?
false
Services consist of cost of goods sold. True or false?
false
Start-up costs are the only costs that businesses ever have to invest in. True or false?
false
When you write your marketing strategy in your marketing plan, you will never need to revise it. True or false?
false
Writing a marketing plan is only a strategy to make potential financiers think you know what you are talking about. True or false?
false
Writing a marketing plan will infallibly predict how your business will develop in the next year. True or false?
false
You need a marketing plan if you are marketing to businesses but not if you are marketing to individuals. True or false?
false
Your opportunities include providing new goods or services to existing or undeveloped advertising segments.
false
Which of the following functional systems would be integrated into the ERP? (Choose all that apply.)
human finance purchasing
Developing an overall advertising strategy is __________.
the first step in connecting goals with advertising strategy
E-commerce websites should develop and post a privacy policy specifically expressing _________. (Choose all that apply.)
the information that will be collected whether the business will share the information how the information will be stored
Present value is not
the sum of all cash flows, the initial investment of a project, or the payout received after selling an investment
SMART goals are to be specific, measurable, achievable, relevant, and __________.
timely
A common mistake among business owners is to underestimate expenses and financial requirements. True or false?
true
A database of business information that is programmed and organized to produce reports on the operation of the business is called a management information system. True or false?
true
A good management information system can increase office efficiency. True or false?
true
A higher cost of capital means an opportunity has higher risk, and therefore the future cashflows are discounted more heavily than an opportunity with a lower cost of capital. True or false?
true
A management information system has to fit the needs of the business. True or false?
true
A manufacturing facility should be located in an area where residents can be trained as employees. True or false?
true
A marketing plan will help you refine your start-up and operational costs, refine your definition of your customer, and set forth a plan to advertise successfully. True or false?
true
A simple communications strategy may not require hiring an ad agency. True or false?
true
A source of funds can be debt and equity. True or false?
true
A virtual company would be likely to use cloud computing. True or false?
true
A works-like prototype functions like the finished good but does not look like it. True or false?
true
Advertising agencies help the entrepreneur communicate with the clients or customers. True or false?
true
All else being equal, an opportunity with a Cost of Capital of 10% with a $5,000 cash inflow in Year 1 will have a higher NPV compared to an opportunity with a $5,000 cash inflow in year 2. True or false?
true
An ERP system allows operations managers to monitor quality requirements. True or false?
true
An example of an online company that processes debit cards and credit card transactions is PayPal. True or false
true
An integrated software solution that incorporates all the functions of a business, such as finance, human resources, planning, manufacturing, sales, marketing, customer service, and distribution is called an ERP. True or false?
true
Business functions are considered valuable when they give a company a distinctive competitive competency. True or false?
true
Cloud computing can help save on start-up costs. True or false?
true
Cloud computing is a system that provides storage for data, hardware, and software services from a centralized location on the internet. True or false?
true
Cloud computing stores data on remote servers. True or false?
true
Companies that are using multiple information systems may have increased costs because of maintenance for those systems. True or false?
true
Consumer purchases depend on timing and can often be deferred until more resources are available. True or false?
true
Despite your ethical code of conduct, your manufacturer can still provide dangerous working conditions for their employees. True or false?
true
Entrepreneurs foster a creative, learning work environment to encourage problem-solving. True or false?
true
Entrepreneurs usually have at least 10 years of industry and management experience. True or false?
true
Facebook is one good way to publicize your business. True or false?
true
Financial income includes the income statement. True or false?
true
For lower shipping costs, it's best if manufacturers are located close to their suppliers
true
Funds from a crowdsourcing campaign are not reflected on the equity portion of the source of funds schedule. True or false?
true
GIGO is a computer term that means that the information coming out of a computer is only as good as the information that went in. True or false?
true
Generic products, such as pizza, appeal to a greater number of customers than specialty items, such as artwork. True or false?
true
If the business will have employees, then estimated employee wages need to be considered in the start-up budget. True or false?
true
If you gain a customer, you want them to come back, buy again, and tell their friends about your business. True or false?
true
If your net profit margin is less than 5%, you can forecast higher revenues. True or false?
true
In your business model, your market segment can be either consumers or businesses. True or False?
true
It is a good idea to include a statement of a marketing strategy in your marketing plan. True or false?
true
It's a good idea to have a business account to separate your business transactions from your personal transactions. True or false?
true
It's wise to build an advertising emergency fund. True or false?
true
Knowing the 4 Ps helps you write your marketing plan, and it also helps you back up and make major decisions about the direction of your business. True or false?
true
Manufacturing efficiency is indicative of a highly skilled workforce
true
Net profit margin equals net income divided by revenues. True or false?
true
One advantage to hiring an advertising agency is that the agency has a broader knowledge of the resources needed to accomplish certain advertising projects. True or false?
true
One advantage to using e-commerce is customer convenience. True or false?
true
One advantage to using the cloud is that it provides an opportunity for employees to easily collaborate. True or false?
true
One low-cost advertising method is to advertise through social media. True or false?
true
One of the risks of outsourcing is losing control over the quality of your goods. True or False?
true
Operations managers should select a manufacturer that has the capabilities to ensure the quality envisioned and promised to customers. True or false?
true
Opportunities include serving your current customers with new products and expanding your business with new customers with your existing products. True or false?
true
Positive cash flow means cash entering your business checking account. True or false?
true
Prototypes are protected by intellectual property laws. True or false?
true
Rental or purchase of a building is an example of a start-up cost that an entrepreneur may need to consider. True or false?
true
The United States is ranked 17th among the world's freest economies. True or false?
true
The ability to quickly react to changes in the marketplace is an advantage found by virtual companies. True or false?
true
The act of conducting sales transactions over the internet is called e-commerce. True or false?
true
The best way to understand consumer behavior is to relate it to your own life. True or false?
true
The bottom line number of any income statement can be positive, negative, or zero. True or false?
true
The fact that employees can work from home could help them create a better work-life balance. True or false?
true
The flexibility of the virtual company can be both strength and a weakness. True or false?
true
The goal of advertising is to achieve or exceed forecasted sales goals. True or false?
true
The government will not interfere in an entrepreneur's business unless he or she commits a crime. True or false?
true
The objectives section of the corporate strategy document is where you identify performance targets, such as net profit margin. True or false?
true
The online environment creates a risk for the leaking of personal information because the internet is used to conduct transactions. True or false?
true
Threats can eliminate your opportunities and endanger your business model.
true
Two financial ratios that measure liquidity are current ratio and working capital. True or false?
true
Unless a business function is valuable, it may be outsourced to a vendor with more expertise. True or false?
true
With current technology, it is easy for competitors to enter the online marketplace. True or false?
true
Writing a marketing plan helps you determine the scope of your business and plan out specific budgetary obligations. True or false?
true
Writing down a good strategic plan will help you develop a winning long-term strategy and guide your budget. True or false?
true
A new business should plan to break even within __________.
two years of operation
A management information system that is easy to learn and use is said to be __________.
user-friendly
After projecting for revenues and expenses, the business owner calculates the net present
value
The amount of money needed to operate a business is the __________.
working capital
You may experience a cash shortage when
working capital is negative and the current ratio is less than 1
An ERP system can help operations managers monitor their workers'
workplace injuries
Using the 4 Ps to create a marketing plan provides the precision needed to sell to __________.
your targeted customers
What percentage of the U.S. population owns a small business?
less than 10%
During any day, week or month, the amount of money buyers will spend is __________. (Choose all that apply.)
likely to change if just the right marketing message reaches them not likely to change
The negative aspects of outsourcing include __________. (Choose all that apply.)
loss of quality control damage to brand image dependence on outside experts
The cheapest type of prototype is usually
low fidelity
A type of information system that provides decision makers with preselected information is called _________.
management information system
A type of information system that provides decision-makers with requested reports based on previously input data is called a __________.
management information system
The part of the business plan that contains the business owner's track record is the __________.
management team
Which companies play a vital role in the long-term operational longevity of any business? (Choose all that apply.)
manufacturers suppliers service providers
Which of the following is a group of consumers that buy for similar reasons?
market segment
The component of a business plan in which business owners decide advertising media is the __________.
marketing plan
Entrepreneurs typically grew up in __________.
middle class families
When solving problems, entrepreneurs decide which option is best, based on available time and __________.
money
Business owners may focus too much on sales and company size rather than __________.
net profits
Entrepreneurs see market growth as ideal because customers
never bought from a previous competitor
Wages and benefits are examples of _________ expenses.
operating
The mozzarella cheese in a pizzeria is an example of a(n)__________ cost.
operational
SWOT analysis stands for strengths, weaknesses, ___________, and threats
opportunities
The goal of advertising for a small business is to drive__________ and enable you to meet your __________ forecast.
sales; profit
Cash flow from operating activities is the cash generated by which of the following?
selling goods or services to customers
You can try to conserve cash by __________.
selling more goods or services and cutting operating expenses
In 2015, Americans spent most of their money on
services
A SMART goal is __________.
specific
If you can't raise the money for your __________ budget, you may not have a viable business opportunity.
start-up
The kitchen equipment that was bought by the pizza place is an example of __________ costs.
start-up
A law firm, a commercial bank, and an advertising agency are examples of __________.
strategic alliances
To ensure that their employees get their work done, entrepreneurs serve as __________.
supervisors
Which of the following are stakeholders in a business? (Choose all that apply.)
suppliers employees banks customers
Which of the following states how the entrepreneur will follow the strategy to achieve projected revenue?
the SMART goals
GIGO is a term that means __________.
the content of a report issued by the system is only as accurate as the previously input data on which the report is based
Employees who work remotely may__________. (Choose all that apply.)
- have difficulty feeling connected to their colleagues - not have the discipline to work at home - experience better work-life balance
The cost of building a manufacturing facility include __________.
- land - buildings - real estate taxes
Entrepreneurs are usually in which age range when they start their business?
35-54
Correct analysis of the __________ can guide businesses to make profitable marketing and buying decisions. (Choose all that apply.)
4 Ps logistics
Which of the following describes why the lemonade stand in the park was successful?
A lot of thirsty customers in the right location
Who stated that people satisfy basic needs first, safety and security needs second, love/belonging needs next, and then self-esteem and actualization needs?
Abraham Maslow
Entrepreneurs can organize their business in which of the following ways?
All of the Above
Which of the following describes good marketing strategy?
All of the above
Which of the following is a tip for creating a strong privacy policy?
All of the above.
Roberto operates an online office supply store. He regularly sells to business customers, so his operation would be an example of __________.
B2B e-commerce
An online auction site could be classified as what type of e-commerce business?
B2C
A state government site allows businesses to pay their sales taxes electronically. This e-commerce model is called __________.
B2G
The Bureau of Motor Vehicles allows trucking companies to register their trucks online. This is an example of which type of business model?
B2G
Which of the following did Maslow consider to be the most immediately important needs?
Basic needs
If a buyer satisfies basic needs first, safety needs second, and higher needs later, he or she will make these purchases in which order?
Groceries, home security system repair, Valentine flowers
Which aspect of an entrepreneur's background best prepares him or her for business ownership?
Management Experiment
Which of the following statements about consumer buying is accurate? (Choose all that apply.)
Many needs compete for our attention. Basic needs are the most important of these. We cannot satisfy all our needs with limited resources. Purchases depend on timing and can be deferred.
Essential communication with the market is called __________.
advertising
Marketing firepower consists of __________.
advertising and promotion
A business model includes which of the following components?
all of the above
A current liability is money set aside to pay for future
all of the above
A prosperous economy is defined by having more __________.
all of the above
An attractive sector is worth an investment due to which trends?
all of the above
Business owners can avoid weaknesses at the outset by crafting
all of the above
Entrepreneurs deploy a differentiation strategy in order to __________.
all of the above
Entrepreneurs establish performance mechanisms to measure __________
all of the above
Entrepreneurs work very hard at
all of the above
Failure to have sufficient inventory can
all of the above
Government can be a threat to your business model due to __________.
all of the above
In the United States, entrepreneurship has thrived due to __________.
all of the above
Operations managers can use an ERP system to
all of the above
Opportunities, demographic trends, and competitors are typically covered in __________.
all of the above
Term loans are used to buy long-term assets such as
all of the above
Total operating expenses include which of the following?
all of the above
When conducting an external analysis, you are identifying barriers to future success, such as
all of the above
When designing a good, you make decisions regarding its
all of the above
When selecting a dependable manufacturer, you may consider which of the following?
all of the above
When selecting a dependable supplier, you may consider which of the following?
all of the above
Which is an advantage of an ERP system?
all of the above
Which of the following describes how customer identification can help business owners?
all of the above
Which of the following is a benefit of cloud computing?
all of the above
Which of the following items have been replaced by apps on cell phones?
all of the above
You'll most likely sell your product if the customer __________ your product.
all of the above
The goal of advertising for a small business is to drive __________.
sales
The amount of money needed to start a business is the __________
capital budget
Net income plus depreciation equals
cash from operating activities
Outsourcing raises the risk of leaking trade secrets to your
competitors
The successful method for implementing your advertising campaign strategy is __________.
creating and implementing SMART goals
A __________ liability is a debt or money owed within 12 months
current
If your ________ ratio is less than 1, you may experience a cash shortage
current
To calculate working capital, take current assets and subtract __________
current liabilities
Which production strategy is used by print shops producing advertising banners?
customer ordering
If your cost of capital is 10%, which opportunity will yield the highest NPV? Opportunity A: an initial investment of $10,000, and cash inflows of $5,000 in year 1, $3,000 in year 2, and $5,000 in year 3 Opportunity B: an initial investment of $11,000, and cash inflows of $7,000 in year 1, $3,000 in year 2, and $5,000 in year 3 Opportunity C: an initial investment of $10,000 and cash inflows of $4,000 in year 1, $2,000 in year 2, and $8,000 in year 3
opportunity b
Wages _________ are future salaries to employees
payable
All of these are examples of investing activities except for
paying interest
Sources of funds from equity can come in the form of _______. (Choose all that apply.)
personal investment family investment
Supply chain members are crucial to your business because they __________.
produce your good or services
Individuals who give money via crowdfunding, often receive __________
product
You can damage your company's reputation by contracting with a manufacturer that
provides great working conditions
The R in SMART (for SMART goals) stands for __________.
relevant
What normal overhead expenses can a virtual company avoid or greatly reduce? (Choose all that apply.)
rent utilities landscaping around the building
When building an advertising budget, it's a good idea to do which of the following? (Choose all that apply.)
research your area to learn the average amount that businesses of your size spend on advertising
Businesses fail when business owners overestimate __________.
revenues
