BOT 2613 Midterm

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Sales records are of very little value to a buyer in evaluating a company's worth.

False

Timing has little to do with a new venture's success or failure.

False

Short-term debt is paid back in-

One Year

A method of raising capital is through the private placement of securiteies

True

Structured and focused chaos is necessary for creativity to occur.

True

When securing a bank loan, which of the following is not a question an entrepreneur should be prepared to answer?

What is the price of your product?

The most common source of debt financing is-

Commercial Banks

A great abundance of reliable data is available concerning the start-up, performance, and failure of new ventures.

False

An entrepreneur's decision to ignore the market is safe if he or she is sure that the idea will be a success.

False

Corporate venture capital can offer strategic and tactical advice, an operating budget, and credibility but started to decline in 2017, and this trend is expected to continue.

False

The innovation process involves only the development of a good idea.

False

The term risk versus loss refers to the amount of return for funds invested.

False

Truly creative people are always geniuses.

False

With a nonroutine venture, the initial innovation will maintain the company's competitive advantage without new technology.

False

Solid analysis and evaluation of the feasibility of the product/service idea are critical tasks in starting a new business.

True

Sophisticated investors are wealthy individuals who invest more or less regularly in new or early- and late-stage ventures.

True

The entrepreneurial motivations of individuals relate to the entrepreneur, the environment, and the venture.

True

The four basic types of innovation are invention, extension, duplication, and synthesis.

True

The growth pattern of sales is critical for an entrepreneur to make correct forecasts.

True

The most common sources of debt financing are commercial banks.

True

The terms upside gain and downside loss refer to the profits the business can make and the losses it can suffer.

True

The way to approach a new business venture is to design a good or service that is unique.

True

Uniqueness in a product or service can be demonstrated through a new-new approach or a new-old approach.

True

When purchasing an existing business, the prospective owner should conduct an assessment of the business's current group of employees.

True

Which of the following is not a key question a prospective buyer needs to ask in buying a business?

What is the owner's personal net worth.

A disadvantage of debt financing is-

Regular Interest Payments

Advantages of debt financing include all of the following except-

Regular Interest Payments

Which of the following is an example of an intangible asset?

Reputation

SEC stands for the-

Securities and Exchange Commission

Which of the following is not an advantage to buying a franchise business?

Structured Fees

Pricing becomes less of a concern when customers know about a product's unique characteristics that are superior to the competition.

True

Sources of debt financing include trade credit, accounts receivable financing, factoring, and finance companies.

True

Use of debt to finance a new venture involves a payback of the funds plus an interest fee (interest) for the use of the money.

True

39.A __ approach indicates the importance of people's awareness of their daily lives for developing new business ideas.

New-New

Which of the following is not type of debt financing?

Private Placement

Successful creations do not require investigation and information gathering.

False

The cognitive ability of entrepreneurs to acquire and transform information has yet to be studied.

False

Creativity cannot be developed or improved.

False

Most entrepreneurs are objective when they evaluate their new idea.

False

Most entrepreneurs hire lawyers to brief them on the legal issues surrounding a new venture.

False

A franchise is any arrangement where the owner has licensed others to sell goods or services by which of the following?

Trademark

Creativity, in the entrepreneurial context, is the generation of ideas that result in the improved efficiency or effectiveness of a system.

True

Entrepreneurs are always looking for unique opportunities fill needs or wants.

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

Failure to anticipate the technical difficulties related to developing or producing a product can sink a new venture.

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

Innovation the process by which entrepreneurs convert opportunities into marketable ideas.

True

Lack of transparency and trust by the entrepreneur is a common cause of new- venture failure.

True

Many entrepreneurs do not understand the marketing life cycle of a new product.

True

Many inventions and innovations are a result of inventors seeing new and different relationships among objects, processes, materials, technologies, and people.

True


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