Entrepreneurship questions -content– Q1. Which of the following factors acts as fuel to feed the nation’s entrepreneurial fire? a. Greater opportunities for entrepreneurial education b. The shift from an industrial economy to a service economy c. Increasingly powerful technological advancements that are available at affordable prices. d. All of the above. Q2. Bennett is considering buying a business and has collected the following information: Projected net earnings for next year = $117,000; rate of return on a similar risk investment = 27%. Hoping to use the market approach, Bennett has located three similar companies, whose stock is publicly traded. Their price-earnings ratios are 2.84, 2. 95, and 3.12. Under the market approach, how much is the business worth? a. $117,000 b. $433,333 c. $93,822 d. $347, 490 Q3. Which element of the strategic management process addresses the first question of any business venture: “What business am I in?” a. vision b. mission c. SWOT analysis d. Strategy Q4. The broad, long-range attributes that a business seeks to accomplish are called: a. goals b. objectives c. strategies d. key success factors Q5. The price paid for a business typically is ________ the terms on which the purchase was made. a. more important than b. less important than c. about as important as d. None of the above. Q6. The primary motivating force behind entrepreneurs is: a. money b. fame. c. achievement. d. recognition. Q7. __________ is the ability to develop new ideas and to discover new ways of looking at problems and opportunities. a. Innovation b. Creativity c. Entrepreneurship d. Brainstorming Q8. Which of the following statements concerning franchising is true? a. Franchise sales total more than $1 trillion. b. Franchises account for 44 percent of all retail sales. c. A new franchise opens somewhere in the world every six-and-a-half minutes d. All of the above. Q9. Which of the following should alert a potential franchisee that a franchiser is dishonest? a. Claims that the franchise contract is a standard one and that “you don’t need to read it.” b. No written documentation to support claims and promises the franchiser makes about the franchise, its operation, and its performance. c. Reluctance to provide a list of existing franchisees to talk to. d. All of the above. Q10. The balanced scorecard: a. gives managers a comprehensive view of an organization’s performance from both a financial and an operational perspective. b. operates on the premise that relying on any single measure of a company’s performance is dangerous. c. measures a company’s performance by viewing it from a financial perspective, a customer perspective, an internal business perspective, and an innovation and learning perspective. d. all of the above. Q11. Given the fact that most small companies lack the resources to reach a national or international market, many entrepreneurs choose to pursue a __________ strategy in which they specialize in meeting the needs of a specific target market segment. a. low-cost b. differentiation c. focus d. maintenance Q12. __________ are entrepreneurial couples who work together as co-owners of their business. a. Dropouts b. Copreneurs c. Castoffs d. Angels Q13. Franchise experts consider the three most important factors in franchising to be: a. training, advertising, and location. b. management expertise, financial reserves, and customer traffic. c. financing, timing, and location. d. location, location, and location. Q14. Which of the following factors plays a role in determining the rate of return used to value a business using one of the earnings approaches? a. the basic, risk-free rate of return b. an inflation premium c. the risk allowance for investing in that particular business d. all of the above Q15. Today, home-based businesses: a. are confined primarily to the traditional areas of arts and crafts. b. are booming because of their low start-up costs, flexibility, and ability to take advantage of modern technology. c. are so small that they produce negligible incomes for their owners. d. all of the above. Q16. The period of time allowed for the subconscious to reflect on information that has been gathered is called: a. marination b. reflection c. illumination d. incubation Q17. Which form of ownership has the greatest ability to attract capital? a. sole proprietorship b. partnership c. corporation d. S-corporation Q18. Bizcomp found the average sale price for small businesses across the United States was _____ times earnings. a. 15 b. 25 c. 0.05 to 0.10 d. 2.7 Q19. __________ franchising involves combining two or more complementary franchises, such as a Texaco gas station, a Burger King restaurant, and a TCBY yogurt franchise, in the same location. a. master b. conversion c. multiple-unit d. Piggyback Q20. Which of the following activities comes first in the strategic management process? a. Formulate a meaningful mission statement b. Identify the company’s strengths, weaknesses, opportunities, and threats. c. Identify the key factors for success in the business d. Develop a clear vision for the business. Q21. In which of the following countries is entrepreneurial activity most prevalent? a. Japan b. Germany c. Great Britain d. United States Q22. The aggregation of factors that sets a small business apart from its competitors and gives it a unique position in the market is its: a. mission b. competitive advantage c. SWOT d. Strategy Q23. Which of the following statements concerning family businesses is false? a. Family businesses account for just 10 percent of all of the companies in the United States. b. Family businesses employ 50 million people and account for over 55 percent of the nation’s GDP. c. A significant threat to family businesses comes from within: only about 30 percent of them survive to the second generation. d. All of the above. Q24. Bennett is considering buying an existing business and has collected the following information: Projected net earnings for next year = $117,000; owner’s salary = $34,000; rate of return on a similar risk investment = 27%. Using the capitalized earnings approach, how much is the business worth? a. $151,000 b. $433,333 c. $307,407 d. $40,770 Q25. A rule of thumb for valuation of a business is to offer the owner 2.7 times the company’s earnings. a. true b. false Q26. A process in which a small group of people interact with very little structure with the goal of producing a large number of ideas is called mind-mapping. a. true b. false Q27. To form a limited liability company (LLC), an entrepreneur must file articles of organization and by-laws with the state corporation commission or secretary of state. a. true b. false Q28. For years, a small, locally-owned pizza restaurant located near a university in a small town has focused on the university’s students, offering them special student discounts and free on-campus delivery. Recently, Domino’s Pizza announced its intention to open a new location in the same town so that it can sell pizza to the university students. To the locally-owned pizza restaurant, Domino’s decision represents a: a. strength b. weakness c. opportunity d. threat Q29. About 85 percent of the companies that are available for sale are: a. listed with business brokers. b. advertised in the “Businesses for Sale” section of major newspapers. c. found in the Internet. d. tucked away in the “hidden market” of companies that are for sale but are not advertised as such. Q30. Although this exit strategy is the safest path for a business owner selling out, it is also the most expensive, given the tax liability it generates for the seller. a. straight business sale b. selling a controlling interest c. selling to company employees through an employee stock ownership plan (ESOP) d. selling to the seller’s children by establishing a family limited partnership Q31. An exclusive right that protects the creator of original works is called a: a. trademark b. patent c. copyright d. All of the above. Q32. A company whose owner wants to sell to her employees by establishing an employee stock ownership plan (ESOP) should: a. be profitable b. have at least 15 to 20 employees c. have an annual payroll of at least $500,000 d. all of the above Q33. The QWERTYUIOP configuration so common on computer keyboards is an illustration of which barrier to creativity? a. Searching for the one “right” answer b. Blindly following the rules c. Becoming overly specialized d. Avoiding ambiguity Q34. Which of the following statements concerning core competencies is false? a. Core competencies are a unique set of capabilities that a company develops in key operational areas that allow it to vault past competitors. b. b. Small companies’ core competencies often originate from the advantages their size offers. c. Entrepreneurs must constantly change their core competencies. d. Developing core competencies does not necessarily require a company to spend a great deal of money. Q35. The most valuable financial resource any small business can have is: a. cash b. accounts receivable c. bank line of credit d. retained earnings Q36. The Uniform Franchise Offering Circular (UFOC): a. is not required from franchisers with fewer than 10 franchised outlets. b. must be checked, verified, and approved by the Federal Trade Commission before franchisers can use it. c. is designed to provide franchisees with important information about a franchise and must be given to franchisees before they sign a franchise contract or pay any money to the franchiser. d. All of the above. Q37. The best method for determining the value of a business is: a. the adjusted balance sheet technique b. the excess earnings method c. the capitalized earnings approach d. the discounted future earnings approach e. There is no “best method” of determining the value of a business. Q38. ________ is the ability to see the similarities and connections among various data and events. a. Vertical thinking b. Lateral thinking c. Convergent thinking d. Divergent thinking Q39. In most business sales, a. the buyer pays the seller 100 percent of the purchase price at the closing of the deal. b. the seller finances 100 percent of the purchase price over a 30-year time period. c. the buyer makes a down payment up front with the seller financing the remaining 30 to 80 percent of the purchase price over three to ten years. d. the actual price the buyer pays is much more important than the structure and the terms of the deal. Q40. Which of the following requirements must an S-corporation meet? a. It must be a domestic corporation. b. It can issue only one class of common stock, but it can issue voting and nonvoting shares of common stock. c. It cannot have more than 75 shareholders. d. All of the above. Q41. The basis for the global economy today is __________ capital. a. financial b. manufacturing c. intellectual d. economic Q42. Polaroid’s Creativity and Innovation Lab reports that out of every 3,000 new product ideas, __________ are actually launched, and __________ become(s) successful in the market. a. 1000; 500 b. 500; 250 c. 10; 3 d. 2; 1 Q43. In a competitive profile matrix, a factor that represents a major strength to a company would receive a rating of: a. 1 b. 2 c. 3 d. 4 Q44. The _____ specialized a business is, the _____ the likelihood that a bargain may be found. a. more; greater b. more; lesser c. less; greater d. less; lesser Q45. __________ franchising is a system in which a franchiser provides franchisees with a complete business system, including a license for the tradename, the products or services to be sold, the physical plant, the methods of operation, a marketing plan, and other necessary business services. a. tradename b. product distribution c. pure (or business format) d. process Q46. __________ is the practice of gathering, organizing, and disseminating the collective wisdom and experience of a company’s employees for the purpose of strengthening its competitive position. a. strategic management b. differentiation c. knowledge management d. paradigm busting Q47. To validate an idea is accurate and useful, entrepreneurs may: a. conduct experiments b. run simulations c. test market d. build prototypes e. All of the above. Q48. A plant patent can be obtained: a. for the layout of a new manufacturing facility. b. extends for 20 years from the date of filing. c. only if the plant can be reproduced asexually d. None of the above. Q49. The failure rate for franchises is __________ the failure rate for independent businesses. a. lower than b. higher than c. the same as d. cannot be determined Q50. Experts estimate that __________ percent of franchisers are dishonest. a. 5 to 10 b. 15 to 20 c. 25 to 30 d. 45 to 50 PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A GOOD DISCOUNT

2016-09-21