Entrepreneurship Final
Robert Mondavi came up with all of the following process innovations except: -Steel fermentation tanks -Labels that indicated when the wine was cold -Aging wines in new French oak barrels -Vacuum corking of bottles
-Labels that indicated when the wine was cold
_____ includes initiative and risk taking, as well as competitive aggressiveness and boldness. - -Self-renewal -Proactiveness -Innovativeness -New business venturing
-Proactiveness
Which item is not part of the new entry generation stage in the entrepreneurial strategy process? -Technical knowledge -Risk reduction strategies -Rare resources -Market Knowledge
-Risk reduction strategies
The first step in establishing corporate entrepreneurship in an organization is: -Finding mid level managers to champion ideas -Securing commitment from top management -Learn to be more productive with fewer resources -Developing ways to get closer to customers
-Securing commitment from top management
Which among the following aspects affects an entrepreneur's perception of feasibility? -Locus of control -Learning style -Perceived desirability -Self-efficacy
-Self-efficacy
By entering a market later, -the player gets to operate only for a grace period. -the venture can build a reputation as a "founder" -customer uncertainties have already been substantially reduced. -the company can erect barriers to entry and imitation.
-customer uncertainties have already been substantially reduced.
When an entrepreneur pursues a new entry opportunity only to find out later that he or she had overestimated his or her ability to create customer demand it is a(n): -error of omission. -technological error. -window of opportunity. -error of commission.
-error of commission.
The initial registration for a trademark lasts: -20 years. -14 years. -17 years. -10 years.
10 years
In a straight commercial loan funds are typically used for what time period? -Less than 30 days -30-90 days -Up to one year -180 days
30-90 days
A bank may finance up to _______ of a company's accounts receivable. -50% -70% -80% -60%
80%
Trade secrets can be protected for: -14 years according to state law. -50 years if renewed to the maximum allowed, five 10 year renewable terms. -20 years according to federal law. -an unlimited period of time.
An unlimited period of time
This problem-solving method requires the entrepreneur to list the properties of an item or problem and then look at each from a variety of viewpoints. -Value analysis -Attribute listing -Brainwriting -Big dream approach
Attribute listing
What type of innovation is illustrated by the ideas of the airplane and penicillin? -technological innovation -ordinary innovation -continuos innovation -breakthrough innovation
Breakthrough innovation
Priceline.com's service where a buyer can submit a price bid for a particular service is an example of a: -utility patent. -business method patent. -design patent. -license.
Business method patent
In the ____ method a new idea is developed through a list of related issues or suggestions. -matrix charting -collective notebook -checklist -Gordon
Checklist
Which of the following interested parties should not have access to the venture's business plan? -Investors -Lenders -Suppliers -Competitors
Competitors
In which form of organization would it be possible for individuals that don't have any ownership stake in the business to make decisions? -Sole proprietorship -General partnership -Corporation -Limited partnership
Corporation
______ is not desirable when brainstorming is in process. -Generating a large quantity of ideas -"Freewheeling" -Criticism -Idea combination and improvement
Criticism
Which U.S. Census publication provides information about production and shipments on a wide range of products? -Current Industrial Report -County Business Patterns -Service Annual Survey -Annual Survey of Manufacturers
Current Industrial Report
It is a practice in some cultures to hug and even kiss when greeting a known business partner. What aspect of nonverbal language is being referred to in the above example? -Time -Business relationship -Space -Customs
Customs
Sole proprietorships: -continue even upon the death -are perpetual. -Death Dissolves the business -have no time limit on how long they may exist.
Death Dissolves the business
Individuals have stronger intentions to act when taking action is perceived to be _____ and desirable. -Feasible -Flexible -Elusive -Risky
-Feasible
Individuals have stronger intentions to act when taking is perceived to be _____ and desirable. -Elusive -Feasible -Flexible -Risky
-Feasible
Which of the following is NOT a stage in Kolter's procedure in bringing a product/service to market? -File for patent protection -Analyze long run opportunities in the market -Design market strategies -Select target market segments
-File for patent protection
Which stage of marketing research is considered to be the most difficult for an entrepreneur due to lack of knowledge or experience in marketing? -Defining the purpose or objectives -Gathering data from secondary sources -Gathering data from primary sources -Analyzing and interpreting the results
Defining the purpose or objectives
Which is the first step in preparing a marketing plan? -Identifying strengths and weaknesses -Defining the business situation -Defining the target market -Establishing goals and objectives
Defining the target market
Market conditions, product attributes, cost benefits and venture attributes are all part of which major consideration in channel selection? -Number of channels -Degree of directness -Number of channel members -Criteria in selection of channel members
Degree of directness
Which of the following is likely to be a fixed cost? -Depreciation -Materials -Commissions -Direct labor
Depreciation
Which of the following ways of distributing the income of corporations is taxed twice? -Salary -Bonus -Dividends -Profit sharing
Dividends
The computerized system developed by the grocery and pharmaceutical industry to link chain members is: -Electronic Demand Distribution (EDD) -Computerized Check Out Systems (CCOS) -Efficient Computer Response (ECR) -Efficient Computer Distribution (ECD)
Efficient Computer Response (ECR)
A trade secret is protected by state law. -True/False
False
An oral agreement is enforceable indefinitely. True/False
False
Developing standardized forms and procedures for recurring events would be an example of the principle of reanalysis. -True/False
False
Discontinuous innovations have the least disrupting influence on established consumption patterns. False/True
False
Entrepreneurial activities tend to immediately affect the bottom line, and hence are seldom overlooked and receive extensive funding and support -True/False
False
Financial reporting to shareholders, bankers, and other investors give the marketing cost for each product and highlight the performance of managers in controlling costs. -True/False
False
Inventory is considered a source of funds because of the revenue it brings in. -False/True
False
Most life-style entrepreneurs eagerly pursue firm growth. -True/False
False
Nonequity arrangements discussed by the text include licensing, management projects and exporting. -True/False
False
One study found that new ventures started within a corporation performed better than those started independently by entrepreneurs -True/False
False
One study found that new ventures started within a corporation performed better than those started independently by entrepreneurs. -True/False
False
Private offerings involve more time, expense, and paperwork than public offerings. -False/True
False
Shares of stock are issued to members of a limited liability company. -False/True
False
Skyrocketing medical costs have resulted in lowering workers' compensation insurance premiums. -False/True
False
The General Agreement on Tariffs and Trade is an attempt to impose significant tariffs on business between nations. -False/True
False
The SBA's Microloan program provides short-term loans of up to $100,000 to small businesses for working capital or purchase of inventory. -True/False
False
The Sarbanes-Oxley Act reduced the responsibilities of the board of directors. -True/False
False
The principle of reanalysis requires the entrepreneur to focus on the most important issues, even when under pressure. -False/True
False
Under Rule 504 of Regulation D, a company can sell up to $1,000,000 of securities to any number of investors, regardless of their sophistication, in any 12-month period. -True/False
False
All of the following are government sources of information except: -NAICS and SIC -Hoovers -Export/Import Authority -Census reports
Hoovers
All of the following are questions an opportunity assessment plan might answer except: -How much capital do I need? -What market need does it fill? -Can a patent be obtained? -What business skills do I have?
How much capital do I need?
Which of the following is a liability of newness? -Lack of established routines and processes give the venture a new slate. -Communication in informal systems is increased. -Costs associated with learning new tasks are high. -Market for potential consumers is limited.
Market for potential consumers is limited
Distribution, pricing, and promotion of the product are discussed in which section of the plan? -Organization -Production -Merchandising -Marketing
Marketing
Which of the following is not a condition that makes a contract legally enforceable? -Money is exchanged for products/services -All parties involved are competent -Acceptance of the offer must be voluntary -Consideration is given by both parties
Money is exchanged for products/services
Intensive, selective and exclusive are all part of which major consideration in channel selection? -Number of channel members -Degree of directness -Number of channels -Criteria in selection of channel members
Number of channel members
______ is the amount owners have invested and/or retained from the venture operations: -Owner's equity -Retained earnings -Cash flow -Profit
Owner's equity
Creative synthesis is an important aspect of the ______ method of creative problem solving. -brainwriting -forced association -attribute listing -parameter analysis
Parameter Analysis
Which government office is responsible for the federal registration of trademarks? -Patent and Trademark Office -Internal Revenue Service -Local Chambers of Commerce -U.S. Trademark Services
Patent and Trademark Office
Which of the following would be an application of funds? -Increase in turnover. -Decrease in assets. -Increase in liabilities. -Paying dividends.
Paying dividends
Which survey method is the most expensive? -Mail -Internet -Telephone -Personal
Personal
A ____ summarizes all the projected sources and applications of funds available to the venture and how these funds will be disbursed. -Break-even analysis -Pro forma sources and applications of funds statement -Cash flow statement -Pro forma income statement
Pro forma sources and applications of funds statement
Philip Morris acquiring Miller Brewing is an example of what type of merger? -Product extension merger -Horizontal merger -Vertical merger -Market extension merger
Product extension merger
The ______ budget is used to project cash flows for the cost of goods produced. -depreciation -operating -production -capital
Production
control compares the cost figures estimated in the business plan with actual day-to-day operations costs. -Production -Sales -Costs -Inventory
Production
What type of insurance would cover fire or burglary damage? -Workers Compensation -Property -Life -Bonding
Property
The ________ is filed to establish a date of conception of an invention and replaces what used to be known as a disclosure document. -trademark -defensive document -provisional patent -copyright
Provisional patent
Which of the following software programs is most widely used by entrepreneurs? -Peachtree -all of these. -Vision Point -Quickbooks
Quickbooks
Fixed operating expenses include all of the following except: -Utilities -Depreciation -Raw Materials -Rent
Raw Materials
Exporting: -is the least popular method for going global. -results in a lack of control over quality. -can be direct or indirect. -results in an inability to realize location economies.
Results in an inability to realize location economies.
Which of the following statement is(are) true? -The entrepreneur issuing the private offering is spared the burden of proving that the exemptions granted have been met. -Rule 504 and 505 permit no general advertising or solicitation through public media. -Rule 505 permits the sale of $10 million of unregistered securities in the private offering in any 12-month period. -Rule 506 provides the first exemption to a company seeking to raise a small amount of capital from numerous investors.
Rule 504 and 505 permit no general advertising or solicitation through public media.
The business plan presentation for potential investors: -should be presented only in writing. -should contain no negative projections. -should enable the entrepreneur to "sell" his or her business concept in a designated period of time. -should provide the entrepreneur's own perspective.
Should enable the entrepreneur to "sell" his or her business concept in a designated period of time.
Which grant program requires partners at universities or other non-profit institutions? -Small Business Innovation Research -The SBA 7(a) -Small Business Technology Transfer -The 504 program
Small Business Technology Transfer
Which type of ownership is the least expensive to start? -Sole proprietorship -Limited partner -Corporation. -General partnership
Sole proprietorship
Which of the following was not discussed in the text as a breakthrough innovation? -Penicillin -Spanx -The Internet -The airplane
Spanx
Which of the following would not be a current asset? -Supplier bills payable in thirty days -Customer receivables -Certificates of deposit that mature in six months -Cash
Supplier bills payable in thirty days
Which form of promotion is too expensive for most entrepreneurs to use? -Print Ads -TV -Radio -Webpage
TV
Which of the following problem-solving techniques begins with group members not knowing the exact nature of the problem? -Parameter analysis -Matrix charting -The Gordon method -Free association
The Gordon Method
_______ is not one of the main perspectives an entrepreneur should consider when writing the business plan. -The entrepreneurs own perspective -The marketing perspective -The employee's perspective -The investor's perspective
The employee's perspective
The largest source of new product ideas is: -the federal government. -the U.S. Patent Office. -the entrepreneur's research and development. -customers
The entrepreneur's research and development
The business plan is designed to guide the entrepreneur: -through the first year of operations. -in the financing process -through the distribution process. in -case of a change in ownership.
Through the first year of operations.
____ is the process of improving an individual's productivity through more efficient use of time. -The principle of effectiveness -Time management -Delegation -The principle of prioritized planning
Time management
A "me-too" strategy consists of copying products that already exist and attempting to build an advantage through minor variations. -False/True
True
A cash sensitivity analysis is used to provide a pessimistic and an optimistic cash estimate. -True/False
True
A narrow scope strategy reduces the risks associated with competition. -True/False
True
A product extension merger occurs when acquiring and acquired companies have related production and/or distribution activities but do not have products that compete directly with each other. -False/True
True
An entrepreneur with loss-orientation would talk about the business -failure with a close friend or relative -True/False
True
Bootstrap financing involves using any possible method, such as discounts for volume purchasing, to conserve cash. -False/True
True
Entrepreneurs who possess both the necessary abilities to make the transition to a more professional management approach and the aspiration to grow their businesses are the most likely to achieve firm growth. -False/True
True
Even though some entrepreneurs may way to grow they lack the ability to do so. -False/True
True
For an organization with a traditional environment. it is best to facilitate an external process to establish an entrepreneurial environment. True/False
True
Growing ventures tie up more cash in their inventory than in any other part of the business. -False/True
True
Health insurance premiums are less expensive if there is a large group of insured participants. -False/True
True
In the concept stage, the refined idea is tested to determine consumer acceptance. False/True
True
In the product development stage, consumer reaction to the physical product/service is determined. False/True
True
Licensing agreements generate revenue while minimizing risk and start-up investment costs. -True/False
True
One of the simplest and probably the most widely used small business accounting software package is Intuit's Quickbooks. -False/True
True
Only the test marketing phase of product planning provides actual sales results to judge the product's customer appeal. -True/False
True
Rule 506 goes one step further than Rule 505 by allowing an issuing company to sell an unlimited number of securities to 35 investors and an unlimited number of accredited investors and relatives of issuers. -True/False
True
Small Business Innovation Research grants are funded by federal agencies which provide a portion of their R&D funds to small businesses. -False/True
True
The long-run performance a firm is dependent upon the ability to generate and exploit numerous new entries. -True/False
True
The standard term of a limited liability company is 30 years. -False/True
True
While dealing with leaking of trade secrets, legal action can be taken only after the secret has been revealed. -False/True
True
The North American Free Trade Agreement (NAFTA) is between which of the following countries? -United States, Brazil, and Canada -United States, Argentina, and Brazil -United States, Mexico, and Brazil -United States, Canada, and Mexico
United States, Canada, and Mexico
Entrepreneurs in the _______ quadrant of firm growth possess the abilities to grow but do not aspire to grow their businesses. -Constrained growth -Actual growth -Unused potential for growth -Little potential
Unused potential for growth
McDonald's acquiring its store franchises is an example of what type of merger? -Market extension merger -Product extension merger -Vertical merger -Horizontal merger
Vertical merger
Which of the following is not a major question that should be addressed by the marketing plan? -Where do we want to go in the long term? -Where have we been? -How do we get there? -Where do we want to go in the short term?
Where do we want to go in the long term?
What type of insurance is mandatory in some states? -Life -Workers' Compensation -Bonding -Property
Workers' Compensation
A turn-key project is best defined as: -a form of direct foreign investment in which the investing entrepreneur holds a minority ownership position in the foreign venture -a method of doing business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners -giving a foreign manufacturer the right to use a patent in return for the payment of a royalty -a method in which an entrepreneur contracts his or her management techniques and skills to a (foreign) purchasing company
a method of doing business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns is over to local owners
Business-to-business marketing involves: -a more direct channel of distribution than consumer markets. -selling products such as household furniture. -selling products and services through certified representatives. -sales to households for personal consumption.
a more direct channel of distribution than consumer markets
Involving employees in the decision-making process is: -an autocratic management style. -a passive management style. -impossible for small businesses. -a participative management style.
a participative management style
Typically, debt financing requires: -an asset as collateral. -reduction of working capital. -reduction of short term assets. -a degree of ownership in the firm.
an asset as collateral
Licensing represents opportunities for: -reach more customers in existing target markets. -an entrepreneur to profit with less risk and costly start-up investment. -expanding into new markets. -an entrepreneur to gain access to others copyrights, trademarks and patents.
an entrepreneur to profit with less risk and costly start-up investment.
An assessment of external uncontrollable variables that may impact the business plan is known as: -an executive summary. -an environmental analysis. -a description of the venture. -a trend analysis.
an environmental analysis
Focus groups: -are an informal method of gathering market information. -consist of 20 to 30 potential customers. -should be led by the entrepreneur. -discuss information in a formal and standardized procedure.
are an informal method of gathering market information
First movers: -are better positioned to satisfy customers. -face more competition than late movers -are not able to gain from moving down the experience curve -fail to secure important channels.
are better positioned to satisfy customers.
In a limited partnership, the limited partners: -are liable only for the amount of their capital contributions. -share the amount of personal liabilities equally. -are allowed to decide on the amount of individual liabilities. -have only insurance as protection against liability suits.
are liable only for the amount of their capital contributions
Changes needed to adapt to environmental changes: -are easier in established organizations because of inertia. -are more difficult because of the tendency to escalate commitment. -don't affect smaller organizations. -can be avoided by late entry.
are more difficult because of the tendency to escalate commitment.
Entrepreneurs who have the necessary abilities for the transition to more professional management practices and the aspiration to grow their business: -usually form life-style firms. -are the most likely to achieve growth. -will achieve growth only if the entrepreneur replaces himself or herself with a professional manager -have little potential for firm growth.
are the most likely to achieve growth.
The basic balance sheet relationship is: -assets equal liabilities plus owner's equity. -assets plus owner's equity equal liabilities. -assets plus liabilities equal owner's equity. -assets equal owner's equity minus liabilities.
assets equal liabilities plus owner's equity
The executive summary section should: -try to summarize every section of the plan. -be prepared before the total plan is written. -be about two to three pages in length. -highlight key financial milestones that have been achieved.
be about two to three pages in length
All of the following would be an operations information need except: -labor skills. -raw materials. -equipment. -break even numbers.
break even numbers
The pro forma cash flow, like the _____ is based on best estimates. -expense statement. -income statement -business cash flow at a certain point of time -actual cash flow statement -expense statement.
business cash flow at a certain point of time
Negative cash flow: -is common for a business during its phase of expansion. -results when cash receipts exceed cash payments. -can cause a firm to fail. -is included in the pro forma income statement.
can cause a firm to fail
Growth of the venture: -lessens legitimacy of the firm. -lessens pressures on existing financial resources. -lessens time spent on management decision making. -causes pressures on human resources.
causes pressures on human resources
Marketing research begins with: -definition of objectives or purpose. -identifying direct marketing strategy. -setting the advertising budget. -collecting a list of primary and secondary sources of information.
definition of objectives or purpose
First movers face: -high entry barriers. -cost disadvantages. -market rigidities. -demand uncertainty.
demand uncertainty
The part of the plan that describes the location and size of the business, the personnel and office equipment that will be needed, and the history of the venture is called the: -production plan. -description of the venture. -organizational plan. -executive summary.
description of the venture
Accredited investors are: -investors whose net worth is $500,000 or less. -investors with incomes in excess of $1,000,000 in each of the last two years: -investors who purchase over $5,000 of the venture's securities. -directors, executive officers, and general partners of the issuing company.
directors, executive officers, and general partners of the issuing company
Market segmentation is the process of: -presenting future opportunities. -describing market conditions. -dividing the market into smaller homogeneous groups. -exploring new market opportunities.
dividing the market into smaller homogeneous groups
Competitor analysis begins with: -gathering samples of the competitors product(s). -documenting the current strategy of each primary competitor. -discovering each competitors advertising budget. -identifying which competitors are most successful.
documenting the current strategy of each primary competitor
According to the text, the most prevalent reason for mergers is: to combine complementary -resources. -taxation. -economies of scale. -currency fluctuations.
economies of scale
The section of the business plan in which the entrepreneur identifies changes occurring on the national and international level is the: -executive summary. -merchandising plan. -environmental and industry analysis. -description of the venture.
environmental and industry analysis
Barriers to entry include all of the following except: -patents -environmental instability -switching costs -building customer loyalties
environmental instability
Creating a positive organization culture involves: -establishing a "we" spirit, not a "me" spirit in meetings and memorandum. -being conservative in the training process. -being more involved in every aspect of the task, and avoiding delegation. -not communicating all matters to key employees.
establishing a "we" spirit, not a "me" spirit in meetings and memorandum
Equity partnerships, royalty partnerships, and joint ventures are used in the _________ stage of limited partnerships to reap the benefits of the effort. -all of these. -development -funding -exit
exit
When conducting research on a new entry: -the more information the entrepreneur has, the more difficult it is to focus on the consumer. -lesser prior knowledge is advantageous since it minimizes the risk of entrepreneurial bias. -the entrepreneur must rely upon surveys more that market knowledge. -extensive research is expensive in terms of time and money.
extensive research is expensive in terms of time and money
In a limited liability partnership (LLP) death or withdrawal of a partner: -has no effect on the partnership. -results in automatic transfer of ownership to surviving partner(s). -always results in termination of the partnership. -may result in problems trying to find a market for the shares.
has no effect on the partnership
A board of directors should not: -be compensated with anything other than stock. -have members with unlimited terms. -be comprised of external advisors. -have an odd number of members.
have members with unlimited terms
When collecting marketing information the entrepreneur should: -not include general environmental information -not aim to define a specific market. -identify competitors. -start with narrow-based data and work down to a more broader scope of information.
identify competitors
In projecting operating expenses for the second and third year costs like ______ are likely to remain stable unless new equipment or additional space is purchased. -advertising -gross profit -insurance -cost of goods sold
insurance
To apply for a trademark: -intent to use the mark is required. -the mark must have been used on goods that are already traded. -the mark must be copyrighted. -the mark must actually have been used on goods.
intent to use the mark is required.
Financial resources and the management team are both examples of the: -external environment. -feedback system. -internal environment. -marketing mix decision variables.
internal environment
The most common approach to gathering primary information is: -experimentation. -interviewing. -focus groups. -observation.
interviewing
By controlling ______ the firm can ensure maximum service to the customer. -production -costs -inventory -sales
inventory
A broad-scope market strategy: -is based primarily on product quality. -provides substantial protection against competitors. -focuses on producing customized products. -is used to reduce market uncertainty.
is used to reduce market uncertainty
In a limited liability company: -laws governing its formation differ from state to state. -owners are called shareholders. -members may transfer their interests at any time. -members are not allowed to share income, profit, expense deduction, loss and credit among themselves.
laws governing its formation differ from state to state
When evaluating business plans ______ are primarily concerned with the four Cs of credit. -vendors -investors -employees -lenders
lenders
The four variables that affect short-term marketing decisions are referred to as the: -marketing system. -marketing plan. -market segment. -marketing mix.
marketing mix
The ______ is the written statement of marketing objectives, strategies, and activities to be followed in the business plan. -marketing mix -marketing plan -marketing structure -marketing system
marketing plan
The major interacting components that enable a firm to successfully provide products to the marketplace are called the: -marketing mix. -marketing system. -marketing structure. -marketing plan.
marketing system
Private offerings: -are not a viable option for new ventures. -involve more time and expense than public offerings. -must comply with Regulation D. -do not involve the SEC
must comply with Regulation D
Capital budgets project expenditures on: -costs of goods sold. -advertising. -future production costs. -new equipment.
new equipment
Organization costs in a proprietorship are: -amortizable over a period of 45 months. -not amortizable. -amortizable for a period of a year. -amortizable over a period of 60 months.
not amortizable
In a horizontal diversification strategy, growth: -involves taking a step back (up) the value-added chain. -occurs at the same level of the value-added chain. -involves opportunities unrelated to the existing value-added chain. -involves taking a step forward (down) the value added chain.
occurs at the same level of the value-added chain
A patent attorney hired as a specialist to help the entrepreneur obtain a patent would most likely be hire on a: -retainer fee -out-of-pocket reimbursement -success fee -one-time fee
one-time fee
In an S corporation, the transfer of interest can occur: -only as long as the buyer is an individual. -only if there is a charter provision for doing so. -depending on the agreement. -only with the consent of the other shareholders.
only as long as the buyer is an individual
The strategy for growth in which the entrepreneur encourages existing customers to buy more of the firm's current product is a: -penetration strategy. -market development strategy. -diversification strategy. -product development strategy.
penetration strategy
Compensation for board members can take the form of all of the following except: -perks, such as vacations. -stock. -cash payments. -stock options.
perks, such as vacations
In designing the organization: -poor design is a significant cause for business failure since the entrepreneur often performs all organization functions themselves. -the entrepreneur easily transitions from a growing start-up to a growing, well managed business. -the initial design is usually complicated. -as the workload increases the organizational structure will contract.
poor design is a significant cause for business failure since the entrepreneur often performs all organization functions themselves
The marketing mix consists of: -product, research, distribution, and promotion. -product, price, research, and promotion. -product, price, distribution, and research. -product, price, distribution, and promotion.
product, price, distribution, and promotion.
Our text tells us that much of an entrepreneur's time during start-up is spent: -negotiating. -allocating resources. -putting out fires. -delegating.
putting out fires
An increase in supplier prices may require: -raising the price of products/services. -reviewing all other expenses and perhaps institute tighter controls. -purchase of lesser inventory. -an increase in the purchasing budget.
raising the price of products/services.
Mortgage financing is another term for: -real-estate asset-based financing. -large equipment asset-based financing. -sale-leaseback financing. -unsecured financing.
real-estate asset-based financing
Information that already exists is called: -secondary data. -target data. -primary data. -marketing data.
secondary data
By being first to market a product, the venture: -can tends to lose customer loyalties to late entrants. -loses out to switching costs. -secures access to important sources of supply. -can sell its products and services at a higher price.
secures access to important sources of supply
A market development strategy would not involve: -selling the existing product in new locations. -selling new products to consumer's purchasing the firm's existing products. -offering the same product to a different demographic group. -using customer experience to develop new uses for the existing product.
selling new products to consumer's purchasing the firm's existing products
The marginal contribution is defined as: -total fixed costs plus total variable costs -total fixed costs minus selling price per unit -variable cost per unit minus the selling price per unit -selling price per unit minus variable cost per unit
selling price per unit minus variable cost per unit
The sales budget: -needs to be prepared only in case of a manufacturing firm. -must be based on actual sales figures for the last month. -must be prepared by the venture's accounting firm. -should be prepared before developing the pro forma income statement.
should be prepared before developing the pro forma income statement
To build a successful organization culture the entrepreneur: -should spend extra time in the hiring process. -needs to remember that it is easier to change a person's attitude than it is to change the person's behavior. -should focus and not try out different things. -must create a workplace where communication from the top down is encouraged.
should spend extra time in the hiring process
While preparing the first draft of the business plan, the entrepreneur should not: -try to define the goals and objectives of the venture. -prepare it with an aim to identify possible barriers to success. -prepare it from his or her personal viewpoint. -take into consideration the constituencies (the evaluators / or "voters") that will ultimately read and evaluate the plan's feasibility.
take into consideration the constituencies (the evaluators / or "voters") that will ultimately read and evaluate the plan's feasibility.
The SBA's primary business loan program is: -the 7(a) loan. -the SBIR -the Microloan. -the 504.
the 7(a) loan
Copyrights are registered with: -the Internet Commission. -the Library of Congress. -the U.S. Justice Department. -the GATT
the Library of Congress
The difference between a board of directors and a board of advisors is that: -the board of directors lacks voting authority. -the board of advisors meets less frequently. -the board of directors is subject to less pressure of litigation -the board of advisors are compensated.
the board of advisors meets less frequently
S corporation status means: -the corporation pays no tax. -shareholders do not have limited liability. -the corporation is subject to a minimum tax of 34 percent. -consent by a majority of shareholders is required for the election of this form of business.
the corporation pays no tax
When a company receives an SBIR grant, any patent rights and software generated belong to: -the Small Business Administration. -the entrepreneur. -the bank securing the loan. -the Federal Government
the entrepreneur
Funds obtained from _______ are the least expensive in terms of cost and control. -commercial banks -the entrepreneur's personal resources -friends and family -private placement
the entrepreneur's personal resources
Which of the following is not a part of the introductory page? -amount of financing needed -statement of confidentiality -the name and address of the company -the names and addresses of all managers
the names and addresses of all managers
Owner's equity represents: -everything of value owned by the firm. -all assets owned by the entrepreneur. -the net worth of the business. -only capital invested by the entrepreneur.
the net worth of the business
When it comes to decision making, in a limited partnership: -limited partners have an equal say, but no liability. -the partners have control based on invested capital. -limited partners have no control over business decisions. -there is no separation of ownership and control.
the partners have control based on invested capital
Which of the following is not a common reason why business plans fail? -objectives are not measurable -the promotional strategy was not taken seriously -no customer need was established -the entrepreneur has no experience in the planned business
the promotional strategy was not taken seriously
The depth and detail of a business plan depend on: -the size and scope of the new venture. -the experience of the entrepreneur. -the target audience. -the amount of capital needed.
the size and scope of the new venture
The formula for break-even analysis is: -total sales divided by selling price plus variable cost per unit. -total fixed costs divided by selling price minus variable cost per unit. -total fixed costs divided by selling price plus marginal contribution. -total variable costs divided by marginal contribution.
total fixed costs divided by selling price minus variable cost per unit.
A trust receipt is a: -type of inventory loan. -type of real estate loan. -type of cash flow financing loan. -type of accounts payable loan.
type of inventory loan
Generally speaking, entrepreneurs see the external environment as: -largely influential. -marginally influential. -uncontrollable. -predictable.
uncontrollable
The captures the steps it takes to develop raw materials into a product and get it into the hands of customers. -inventory -electronic data interchange -value chain -market accounting system
value chain
Fixed assets are those that: -will be used over a long period of time. -are similar to loans and advances. -are intangible. -include cash.
will be used over a long period of time
To assess the potential profitability of a venture, the entrepreneur needs to ascertain expected sales and expense figures for the first: -quarter. -three years. -month. -year.
year
Which among the following aspects affects an entrepreneur's perception of feasibility? - Self-efficacy - Perceived desirability - Learning style - Locus of control
- Self-efficacy
Which of the following is true about corporate ent.? -Teams should be segmented by department -Equity in a new venture should not be used as a reward due to its uncertain value -A company must be willing to invest money without a guarantee of a return in the short term -Top management should not be involved in the process
-A company must be willing to invest money without a guarantee of a return in the short term
Which of the following is true about corporate entrepreneurship? -Equity in a new venture should not be used as a reward due to its uncertain value -A company must be willing to invest money without a guarantee of a return in the short term -Teams should be segmented by department -Top management should not be involved in the process
-A company must be willing to invest money without a guarantee of a return in the short term
The moral support network is different from the professional support network in that: -A professional support network includes finding a mentor -Only the "cheering squad" provides moral support -A moral support network comprises only of personal contacts -Moral support is less important that professional support
-A professional support network includes finding a mentor
An entrepreneur considering if what they are doing makes sense is an example of: -A reflection task -A connection task -A strategic question -A comprehension question
-A reflection task
On the educational background, entrepreneurs: -Who lack a formal education, fail to create new businesses and exploit discovered opportunities -Cite formal education to be indispensable in starting a new business -Are less educated than the general population -Cite an educational need in the areas of finance, strategic planning, marketing, and management
-Cite an educational need in the areas of finance, strategic planning, marketing, and management
Questions designed to increase an entrepreneurs' understanding of the nature of the environment are known as: -Reflection tasks -Comprehension questions -Strategic questions -Connection tasks
-Comprehension questions
Questions designed to increase an entrepreneurs' understanding of the nature of the environment are known as: -Strategic questions -Connection tasks -Reflection tasks -Comprehension questions
-Comprehension questions
In regards to the differences between the entrepreneurial and administrative focuses which of the following is correct? -Ent. focus on slow steady growth and managers focus on. rapid growth -Ent. are driven by controlled resources; managers by opportunity -Ent. rent or sporadically use resources; managers like to own resources -Ent. tend to use a hierarchical management structure; managers use a more fluid, flat approach
-Ent. rent or sporadically use resources; managers like to own resources
Which is the best way to gain knowledge about a potential new entry? -Marketing research -Internet research -Entrepreneur's market experience and knowledge. -Surveys
-Entrepreneur's market experience and knowledge.
Which of the following would NOT occur in the second stage of establishing corporate entrepreneurship in an organization? -Identify an evaluation system for involved employees -Overall program expectations and target results of each corporate venture are established -Ideas that top management is interested in supporting are identified -The amount of risk money available is specified
-Identify an evaluation system for involved employees
Which of the following is true? -Independent, venture-capital-based start-ups by entrepreneurs tend to outperform corporate start-ups significantly -New ventures started within a corporation performed better than those started independently by entrepreneurs -Independent entrepreneurs find difficulty in maintaining a long-term commitment -Corporate ventures become profitable twice as fast as independent ventures
-Independent, venture-capital-based start-ups by entrepreneurs tend to outperform corporate start-ups significantly
The _______ was established to facilitate patent filings in multiple countries. -Patent Cooperation Treaty -General Agreement on Trades and Tariffs -Sarbanes-Oxley Act -Patent and Trademark Office
-Patent Cooperation Treaty
Entrepreneurial Opportunities are defined as: -The entrepreneur's mental processes in deciding whether or not to act on a potential opportunity -New market entry through entrepreneur action -Situations in which new goods, services, raw materials and organizing methods can be sold at greater than their production cost. -A feasibility assessment
-Situations in which new goods, services, raw materials and organizing methods can be sold at greater than their production cost.
The casual process of thinking: -Starts with brainstorming by meeting with industry professionals -Starts with a desired outcome and focuses on the possible means to generate that outcome -Involves bricolage -Starts with what one has and selects among possible outcomes
-Starts with a desired outcome and focuses on the possible means to generate that outcome
Entrepreneurial culture and growth orientation consists of all the following except: -Being creative -The desire to grow at a slow and controlled pace -Focusing on opportunities -Encouraging employees to generate ideas
-The desire to grow at a slow and controlled pace
In Stage One of the McMullen-Shepherd Model: -The ent. decides whether or not there is an opportunity for someone -The ent. consults experts in the market area of interest -The ent. decides whether the opportunity that exists is a match with their own knowledge and motivation -The ent. engages in bricolage
-The ent. decides whether or not there is an opportunity for someone
In Stage One of the McMullen-Shpeherd Model: -The entrepreneur decides wether or not there is an opportunity for someone -The entrepreneur decides whether the opportunity that exists is a match with their own knowledge and motivation -The entrepreneur consults experts in the market area of interest -The entrepreneur engages in bricolage
-The entrepreneur decides wether or not there is an opportunity for someone
Stage Two of the McMullen-Shepherd Model: -The entrepreneur deals with the business failure through counseling -The entrepreneur consults colleagues from previous jobs -The entrepreneur decides whether or not there is an opportunity for him or her personally -The entrepreneur goes through the casual process of thinking structurally
-The entrepreneur decides whether or not there is an opportunity for him or her personally
The first step in establishing corporate entrepreneurship in an organization is: -finding mid level managers to champion ideas -developing ways to get closer to customers -learn to be more productive with fewer resources -securing commitment from top management
-securing commitment from top management
The entire trademark registration process takes approximately: -13 months -7 months -18 months -2 years
13 months
Creativity declines with: -education and work experience. -training and tradition. -mental health and work experience. -age, education and lack of use.
Age, education, and lack of use
What term describes the practice of paying for goods indirectly through another source? -Promotion -Barter -Exporting -Licensing
Barter
Which of the following is defined as having some disruptive influence on established consumption patterns? -Discontinuous Innovations -Dynamically Continuous Innovations -Breakthrough Innovations -Continuous Innovations
Dynamically continuous innovations
______ is not considered a nonequity arrangement. -Turn-key projects -Licensing -Management contracts -Exporting
Exporting
A franchise is the instrument used to protect the owner of the technology from people imitating the technology. -False/True
False
A narrow scope strategy is better than a broad scope strategy in an environment high in uncertainty. -True/False
False
The North American Free Trade Agreement (NAFTA) increases trade barriers and quotas among the U.S., Canada, and Mexico. -True/False
False
The product life cycle consists of five main stages. False/True
False
The three major risk reduction strategies discussed in the text are narrow scope, broad scope and on. -True/False
False
Concerns regarding roads, electricity, banking facilities, communication, and educational systems have to do with a country's: -balance of payments. -political climate. -infrastructure. -economics.
Infrastructure
_______ are both government sources of information that might be helpful in gathering the information needed to start a business. -The Euromonitor and Business -Source Complete -Mergent and The Industrial monitor -NAICS and SIC codes -Business Source Complete and Small Business News
NAICS and SIG codes
Trends for the next decade include all of the following except: -New age music -Health Maintenance -Green products -Clean energy
New age music
______ is defined as the risk of interference with the operations of the venture. -Investment risk -Ownership risk -Operating risk -Transfer risk
Operating risk
Primary data is: -data that is hard to find. -original information collected by the entrepreneur. -data collected by the government. -data that has been collected by the private sector.
Original information collected by the entrepreneur
Licensing is best described as: -a nonequity method of international business in which an entrepreneur contracts his or her management techniques and skills to a (foreign) purchasing company. -a method of doing international business whereby a foreign entrepreneur supplies the manufacturing technology or infrastructure for a business and then turns it over to local owners. -an equity partnership that involves selling patents to foreign governments. -a method that involves giving a foreign manufacturer the right to use a patent, technology, production process, or product in return for the payment of a royalty.
a method that involves giving a foreign manufacturer the right to use a patent, technology, production process, or product in return for the payment of a royalty
Probably the most well-known and widely used technique for creative problem solving is: -forced relationships. -scientific method. -focus groups. -brainstorming.
brainstorming
Imitation strategies: -do not provide organizational legitimacy. -require expensive and extensive research. -are rare and inimitable. -can enhance a firm's performance.
can enhance a firm's performance
In the ______ method, a word is written down, then another, creating a chain of ideas. -Reverse brainstorming -matrix charting -heuristic -free association
free association
The Occupational Safety and Health Act (OSHA) mandated that first-aid kits be available in business establishments employing more than three people. A newly formed company was successful in developing first-aid kits that allowed companies to comply with the standards of the act. This is an example of: -existing products and services as a source for new ideas. -government regulations as a source for new product ideas. -distribution channels as an excellent source for new ideas. -potential consumers as a source for new ideas.
government regulations as a source for new product ideas
Continuous innovations are described as: -having no disruptive influence on established consumption patterns. -having some disruptive influence on established consumption patterns. -having the least disrupting influence on established consumption patterns. -having to establish new consumption patterns due to the creation of a previously unknown product
having the least disrupting influence on established consumption patterns
