ENTR 187 - Entrepreneurship - Sac State - Dr. VanVo

_____ refers to the value of a business that exceeds the sum of the value of all individual assets but that cannot be sold separately from the business. A. Goodwill B. Collateral C. Inventory D. Debt

A. Goodwill

Jacob has started a graphic design company called Interon Graphics. As Interon Graphics moves into the growth phase, which of the following would be Jacob's dominant financial management need? A. Obtaining increasing amounts of cash inflows B. Establishing internal control over assets C. Conserving the money that the business has D. Clearing all debts

A. Obtaining increasing amounts of cash inflows

There are two general sources of gift financing: A. institutional and personal. B. friends and family. C. consumer and commercial banks. D. angel and venture investors.

A. institutional and personal.

After being in business for 24 months, Paul's auto spare parts company Chromson Inc. grows to a relatively stable size. Which of the following would be Paul's primary financial management need at this stage? A. Building owner's wealth B. Clearing all debts C. Implementing bootstrapping techniques D. Establishing internal control over assets

A. Building owner's wealth

The two fastest growing minority groups that represent the largest segments of minority business owners are: A. Hispanics and African Americans. B. Hispanics and Pacific Islanders. C. Asians and African Americans. D. Asians and Pacific Islanders.

A. Hispanics and African Americans.

Which of the following is one of the prime challenges faced by most second career entrepreneurs? A. Keeping personal finances out of the business B. Avoiding overconfidence C. Lacking resources D. Deciding whether to return to work

A. Keeping personal finances out of the business

The _____ is a U.S. government agency that helps people start a business and also provides them support and advocacy. A. Small Business Administration B. U.S. Department of Business Development C. U.S. Department of Commerce D. U.S. Entrepreneurial Administration

A. Small Business Administration

During the start-up phase of a small business the emphasis is on conserving what little cash the new business has. A. True B. False

A. True

Entrepreneurs get used to a do-it-yourself approach, which can be especially trying for second career entrepreneurs. A. True B. False

A. True

One of the seven key strategies of the entrepreneurial way involves effectuation or an approach used to create alternatives in uncertain environments. A. True B. False

A. True

People who buy ownership rights but are not part of the management of the business are known as outside equity investors. A. True B. False

A. True

Succession plans deal with the people who will take over, what roles they will fill, and what supports they will receive. A. True B. False

A. True

Uncertainty of returns in a business is referred to as _____. A. financial risk B. accelerated cash-out C. overpayment D. collateral

A. financial risk

Small businesses are usually: A. imitative in nature. B. characterized by the novelty of their products. C. the same as high-growth ventures. D. not affected by market fluctuations.

A. imitative in nature.

The amount that revenues exceed expenses is referred to as _____. A. profit B. cash flow C. operating margin D. debt

A. profit

Tammy has just opened a donut shop called The Rabbit Hole. Given that The Rabbit Hole is in its start-up phase, which of these would be Tammy's immediate financial management need? A. Building owner's wealth B. Conserving what little money the business has C. Obtaining increasing amounts of cash inflows D. Minimizing debt and increasing asset value

B. Conserving what little money the business has

In family-owned businesses, the board of directors can only be comprised of family members. A. True B. False

B. False

In order to make profits from a small business, the company needs to make an actual product. A. True B. False

B. False

In the U.S., government programs are the number one source for financing small businesses. A. True B. False

B. False

Most businesses run by teams are not family related. A. True B. False

B. False

The majority of new firms go through similar startup processes with those most likely to be successful following a four-step process: Finance, Construct, Promote, Demonstrate. A. True B. False

B. False

When a business enters a phase of rapid growth, one of the challenges it faces is that very few sources of money are available to support its growth. A. True B. False

B. False

_____ are the smallest full-time business. A. High-performing small businesses B. Traditional small businesses C. High-growth ventures D. Lifestyle businesses

B. Traditional small businesses

The challenge of _____ refers to when woman or minority-owned businesses are simply excluded from the opportunities offered to firms owned by white males. A. consistency B. access C. flexibility D. mutuality

B. access

A business run by the individual who owns it is referred to as a(n) _____. A. franchise B. owner-managed firm C. professionally-owned business D. novelty firm

B. owner-managed firm

According to the U.S. Small Business Administration, small businesses generate _____ times the number of patents per employee than do big businesses. A. 35 B. 2 C. 16 D. 50

C. 16

Which of the following is true of a small business? A. Its preferred funding source is other people's money. B. It sells more when it is facing bankruptcy. C. It considers sales as more important than marketing. D. It focuses more on effectiveness than on efficiency.

C. It considers sales as more important than marketing.

Which of the following is a difference between a small business and a high-growth venture? A. For a small business, the preferred funding source is other people's money, whereas for a high-growth venture, it is the owner's own money. B. For a small business, the personal control preference is to involve others, whereas a high-growth venture prefers to retain autonomy. C. A small business focuses on effectiveness, whereas a high-growth venture focuses on efficiency. D. A small business grows when necessary, whereas a high-growth venture grows when possible.

D. A small business grows when necessary, whereas a high-growth venture grows when possible.

_____ is money from selling part of a business to people who are not and will not be involved in the management of the business. A. Dividend B. Bond C. Equity capital D. Outside equity

D. Outside equity

The text defines an entrepreneur as: A. a person who purchases an existing business. B. working for yourself. C. characterized by being different or new D. a person who owns or starts an organization, such as a business.

D. a person who owns or starts an organization, such as a business.

According to the BRIE model, _____ sets up a business as a firm. A. intention B. exchange C. franchise D. boundary

D. boundary

A person's belief in his or her ability to achieve a goal is called: A. growth rewards. B. bootstrapping. C. novelty. D. self-efficacy.

D. self-efficacy.

The weighted average cost (WAC) refers to: A. a legal reduction in taxes by the government. B. the average equity capital costs incurred by a firm per year. C. the percentage cost of obtaining future funds. D. the expected average future cost of funds.

D. the expected average future cost of funds.

Which of the following terms is not one of the four steps in the successful entrepreneurial process? A. Seek. B. Do. C. Plan. D. Check.

A. Seek.

The majority of small business start-ups are funded by bootstrapping. A. True B. False

A. True

The most frequently occurring element of the BRIE model is intention. A. True B. False

A. True

Using low-cost or free techniques to minimize cost of doing business is referred to as bootstrapping. A. True B. False

A. True

Which of the following is true of a high-growth venture? A. It considers sales as more important than marketing. B. Its metastrategy is novelty. C. It focuses more on efficiency than on effectiveness. D. It does not allow for easy delegation of work or responsibilities.

B. Its metastrategy is novelty.

Which of the following is true with regard to minorities in small businesses? A. Minority-owned firms have not grown much in recent years and are a slow growing sector. B. The establishment of both public and private funding and networking initiatives has helped to level the business playing field for minority entrepreneurs. C. There is a phenomenal decline in the number of minority entrepreneurs despite the growth of racial and ethnic groups within the U.S. population. D. Minority entrepreneurs do not face the challenge of access anymore.

B. The establishment of both public and private funding and networking initiatives has helped to level the business playing field for minority entrepreneurs.

Orion Inc. was started as a small organization with five employees. After the first year's profits were made, the owners decided to invest the profits in expanding the business. This is an example of financing the business using _____. A. benchmarking B. bootstrapping C. piggybacking D. outside equity

B. bootstrapping

Money contributed to businesses in return for part ownership of the business is called a(n) _____. A. debt B. equity capital C. gift D. loan

B. equity capital

Which of the following statements about entrepreneurial teams is true? A. Most entrepreneurial teams are family related. B. The majority of new businesses have an entrepreneurial team of a minimum five co-owners. C. The trend is toward even more businesses being developed by a solo entrepreneur. D. Only 10 percent of teams are spouses or life partners working together.

A. Most entrepreneurial teams are family related.

With over 8.3 million businesses owned by women, they account for a quarter of small business revenue nationally. A. True B. False

B. False

_____ measure a management's effectiveness in using the invested capital of the business to provide profits. A. Profitability ratios B. Gross margin ratios C. Return on investments D. Return on equity

C. Return on investments