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ENT3003 Exam 3

Trends for the next decade include all of the following except:
A. Green products
B. New age music
C. Clean energy
D. Health Maintenance
B. New age music
Which of the following statements is true?
A. Customers form the largest source of new ideas for entrepreneurs.
B. While members of the distribution channel may be willing to provide new ideas for entrepreneurs, they may not help market them.
C. The Federal Government is not a source of new ideas since the patent information they collect is confidential.
D. Potential entrepreneurs should establish a formal method for monitoring and evaluating competitive products and services on the market.
D. Potential entrepreneurs should establish a formal method for monitoring and evaluating competitive products and services on the market.
Patents filed with the U.S. Patent Office:
A. are not disclosed to the public.
B. are the property of the U.S. Government.
C. frequently suggest other new products.
D. are only accessible to public limited companies.
C. frequently suggest other new products.
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:
A. distribution channels as an excellent source for new ideas.
B. existing products and services as a source for new ideas.
C. potential consumers as a source for new ideas.
D. government regulations as a source for new product ideas.
D. government regulations as a source for new product ideas.
The largest source of new product ideas is:
A. the U.S. Patent Office.
B. the entrepreneur’s research and development.
C. customers.
D. the federal government.
B. the entrepreneur’s research and development.
Focus groups use which of the following methods?
A. A moderator leads the group in an open, in-depth discussion.
B. A moderator asks each individual in the group questions, interview style.
C. Each participant fills out a questionnaire, followed by individual exit interviews.
D. Each participant obtains new ideas and solutions by focusing on problems.
A. A moderator leads the group in an open, in-depth discussion.
Brainstorming groups should:
A. contain an expert in the field to be discussed.
B. be serious and work-oriented.
C. try to generate as many ideas as possible.
D. encourage criticism of ideas from other participants in the group.
C. try to generate as many ideas as possible.
_____ is not desirable when brainstorming is in process.
A. “Freewheeling”
B. Idea combination and improvement
C. Generating a large quantity of ideas
D. Criticism
D. Criticism
In this method, instead of generating new ideas themselves, consumers are provided with a list of problems in a general product category. What method is the author referring to here?
A. Reverse brainstorming
B. Problem inventory analysis
C. Brainstorming
D. Focus groups
B. Problem inventory analysis
Creativity declines with
A. training and tradition.
B. education and work experience.
C. age, education and lack of use.
D. mental health and work experience.
C. age, education and lack of use.
Probably the most well known and widely used technique for creative problem solving is:
A. brainstorming.
B. focus groups.
C. forced relationships.
D. scientific method.
A. brainstorming.
Reverse brainstorming is much like brainstorming except that:
A. criticism is not allowed.
B. the technique is based on finding solutions.
C. the group need not be careful to maintain good morale.
D. the process usually involves identification of everything wrong with an idea.
D. the process usually involves identification of everything wrong with an idea.
Which of the following problem-solving techniques begins with group members not knowing the exact nature of the problem?
A. Parameter analysis
B. Matrix charting
C. The Gordon method
D. Free association
C. The Gordon method
In the ________ method a new idea is developed through a list of related issues or suggestions.
A. Gordon
B. checklist
C. collective notebook
D. matrix charting
B. checklist
In the ________ method, a word is written down, then another, creating a chain of ideas.
A. reverse brainstorming
B. matrix charting
C. heuristic
D. free association
D. free association
Which of the following creative methods involves having participants write down their ideas several times a day?
A. Collective notebook method
B. Parameter analysis
C. Brainstorming
D. Forced relationship
A. Collective notebook method
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.
A. Value analysis
B. Attribute listing
C. Brainwriting
D. Big-dream approach
B. Attribute listing
This problem-solving method involves developing new ideas by thinking without constraints.
A. Value analysis
B. Attribute listing
C. Big-dream approach
D. Brainwriting
C. Big-dream approach
Creative synthesis is an important aspect of the _________ method of creative problem solving.
A. brainwriting
B. forced association
C. attribute listing
D. parameter analysis
D. parameter analysis
Parameter analysis consists of two main aspects which are:
A. creative synthesis and parameter identification.
B. breakthrough innovation and forced association.
C. attribute listing and parameter identification.
D. parameter variation and verification.
A. creative synthesis and parameter identification.
What type of innovation is illustrated by the ideas of the airplane and penicillin?
A. ordinary innovation
B. continuous innovation
C. technological innovation
D. breakthrough innovation
D. breakthrough innovation
Which of the following was not discussed in the text as a breakthrough innovation?
A. The airplane
B. The Internet
C. Spanx
D. Penicillin
C. Spanx
Which of the following is defined as having some disruptive influence on established consumption patterns?
A. Continuous Innovations
B. Dynamically Continuous Innovations
C. Discontinuous Innovations
D. Breakthrough Innovations
B. Dynamically Continuous Innovations
Continuous innovations are described as:
A. having the least disrupting influence on established consumption patterns.
B. having some disruptive influence on established consumption patterns.
C. having no disruptive influence on established consumption patterns.
D. having to establish new consumption patterns due to the creation of a previously unknown product.
A. having the least disrupting influence on established consumption patterns.
The opportunity recognition process contains all of the following except:
A. work experience
B. reformation
C. entrepreneurial alertness
D. networks
B. reformation
The _______ is defined as the stages each product goes through from introduction to decline.
A. entrepreneurial decision making process
B. test marketing process
C. product planning and development process
D. product life cycle
D. product life cycle
How many stages are in the product planning and development process?
A. Two
B. Three
C. Four
D. Five
D. Five
In what stage would you use the systematic market evaluation checklist?
A. Idea stage
B. Concept stage
C. Product development stage
D. Commercialization stage
A. Idea stage
In the idea stage of the product planning and development process:
A. conversational interviewing is used.
B. product samples are given out.
C. systematic market evaluation is used.
D. multiple brand comparison is used.
C. systematic market evaluation is used.
In what stage would it be most beneficial to use conversational interviews?
A. Idea stage
B. Concept stage
C. Product development stage
D. Commercialization stage
B. Concept stage
In which stage of the product planning and development process would it be appropriate to give product samples to a panel of potential customers?
A. Idea stage
B. Concept stage
C. Product development stage
D. Commercialization stage
C. Product development stage
The stage in the product planning and development process in which actual sales results are available is the:
A. idea stage.
B. concept stage.
C. product development stage.
D. test marketing stage.
D. test marketing stage.
Which area of e-commerce experienced the largest increase in sales from 2010-2011?
A. Digital content and subscriptions
B. Events tickets
C. Consumer Electronics
D. Jewelry and watches
A. Digital content and subscriptions
Total internet spending was roughly _____ billion in 2011.
A. 150
B. 200
C. 250
D. 300
C. 250
What area of e-commerce experienced the third largest increase in sales, 17%, from 2010-2011?
A. Digital content and subscriptions
B. Events tickets
C. Consumer Electronics
D. Jewelry and watches
D. Jewelry and watches
E-commerce in the U.S. grew by ____ between 2010 and 2011.
A. 10%
B. 11%
C. 12%
D. 13%
C. 12%
Orders and sensitive information should be transferred:
A. through credit card companies.
B. by banner ads.
C. over secure servers.
D. through open telephone lines.
C. over secure servers.
What percentage of small businesses have a website?
A. 60%
B. 70%
C. 80%
D. 90%
D. 90%
Which of the companies below were not listed by the book as offering free web hosting?
A. Zymic
B. Amazon
C. 000Webhost
D. Webs
B. Amazon
An opportunity assessment plan:
A. is the same thing as a business plan.
B. is longer than a business plan.
C. has a lot of computer-based spreadsheets.
D. focuses on the opportunity, not the venture.
D. focuses on the opportunity, not the venture.
All of the following are questions an opportunity assessment plan might answer except:
A. How much capital do I need?
B. What market need does it fill?
C. What business skills do I have?
D. Can a patent be obtained?
A. How much capital do I need?
______ is a nonprofit organization that provides free online and in-person assistance to entrepreneurs in the form of training, consulting and mentoring provided mainly by retired executives and entrepreneurs.
A. CSBC
B. NAICS
C. SCORE
D. SIC
C. SCORE
____ and _____ are both government sources of information that might be helpful in gathering the information needed to start a business.
A. Mergent and The Industrial monitor
B. NAICS and SIC codes
C. Business Source Complete and Small Business News
D. The Euromonitor and Business Source Complete
B. NAICS and SIC codes
______ provides information on industries such as aerospace, energy, healthcare and defense.
A. Mergent
B. Plunkett
C. Frost and Sullivan
D. Business Source Complete
C. Frost and Sullivan
All of the following are government sources of information except:
A. Census reports
B. Export/Import Authority
C. NAICS and SIC
D. Hoovers
D. Hoovers
_____________ is the process of an entrepreneur conducting business activities across national borders.
A. Intrapreneurship
B. International entrepreneurship
C. Domestic entrepreneurship
D. Direct importing
B. International entrepreneurship
Concerns regarding roads, electricity, banking facilities, communication, and educational systems have to do with a country’s:
A. infrastructure.
B. balance of payments.
C. political climate.
D. economics.
A. infrastructure.
A country’s _______________ is the difference between the value of a country’s imports and exports over time.
A. gross national product
B. purchasing power parity
C. current account
D. foreign exchange reserve
C. current account
What term describes the practice of paying for goods indirectly through another source?
A. Licensing
B. Barter
C. Promotion
D. Exporting
B. Barter
Which among the following political risks is considered the biggest risk of all?
A. Transfer risk
B. Ownership risk
C. Investment risk
D. Operating risk
B. Ownership risk
______ is defined as the risk of interference with the operations of the venture.
A. Transfer risk
B. Ownership risk
C. Investment risk
D. Operating risk
D. Operating risk
Which of the following statement is (are) true?
A. Most countries have laws and court procedures protecting intellectual property such as those in the United States.
B. Civil laws tend to be relatively nonspecific.
C. Laws of a country regulate the manner in which business transactions are executed.
D. Global entrepreneurs cannot specify in the contract that any contract disputes will be heard in the courts of another country.
C. Laws of a country regulate the manner in which business transactions are executed.
Which of the following is not an aspect of nonverbal or hidden language?
A. Energy
B. Business relationships
C. Space
D. Time
A. Energy
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?
A. Time
B. Business relationship
C. Space
D. Customs
C. Space
Which of the following statements is not true?
A. Religion in a culture defines the ideas for life, reflected in the values and attitudes of individuals and the overall society.
B. The tenets of nonreligious or secularist societies do not affect behavior.
C. The impact of religion varies depending on the strength of the dominant religious tenets and their impact on the values and attitudes of the culture.
D. Religion provides the basis for some degree of transcultural similarity under shared beliefs and attitude.
B. The tenets of nonreligious or secularist societies do not affect behavior.
Which among the following influences whether customers are able to use the good or service properly and whether they are able to understand the firm’s advertising or other promotional messages?
A. Political philosophy
B. Religion
C. Manners and customs
D. Education
D. Education
Motivations for going global, discussed in the text, include all the following except:
A. cheap shipping costs
B. excess production capacity
C. technological advantage
D. competitive pressures
A. cheap shipping costs
Primary data is:
A. data that has been collected by the private sector.
B. data collected by the government.
C. original information collected by the entrepreneur.
D. data that is hard to find.
C. original information collected by the entrepreneur.
Exporting:
A. is the least popular method for going global.
B. results in a lack of control over quality.
C. results in an inability to realize location economies.
D. can be direct or indirect.
D. can be direct or indirect.
_____ is not considered a nonequity arrangement.
A. Turn-key projects
B. Exporting
C. Licensing
D. Management contracts
B. Exporting
_____ has the main disadvantages of high transportation costs, trade barriers, and problems with local marketing agents.
A. Exporting
B. Turn-key projects
C. Licensing
D. Franchising
A. Exporting
Licensing is best described as:
A. a nonequity method of international business in which an entrepreneur contracts his or her
management techniques and skills to a (foreign) purchasing company.
B. 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.
C. 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.
D. an equity partnership that involves selling patents to foreign governments.
C. 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 turn-key project is best defined as:
A. 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
B. giving a foreign manufacturer the right to use a patent in return for the payment of a royalty
C. a method in which an entrepreneur contracts his or her management techniques and skills to a (foreign) purchasing company
D. a form of direct foreign investment in which the investing entrepreneur holds a minority ownership position in the foreign venture
A. 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
A _____ is the joining of two firms in order to form a third company in which the equity is shared.
A. majority interest
B. joint venture
C. product extension merger
D. minority interest
B. joint venture
_____ is a type of merger in which acquiring and acquired companies have related production and/or distribution activities but do not have products that compete directly with each other.
A. Market extension merger
B. Horizontal merger
C. Product extension merger
D. Vertical merger
C. Product extension merger
McDonald’s acquiring its store franchises is an example of what type of merger?
A. Market extension merger
B. Horizontal merger
C. Product extension merger
D. Vertical merger
D. Vertical merger
According to the text, the most prevalent reason for mergers is:
A. taxation.
B. economies of scale.
C. currency fluctuations.
D. to combine complementary resources.
B. economies of scale.
Philip Morris acquiring Miller Brewing is an example of what type of merger?
A. Market extension merger
B. Horizontal merger
C. Product extension merger
D. Vertical merger
C. Product extension merger
All of the following is true of the General Agreement on Tariffs and Trade except:
A. it includes over 100 nations.
B. it reduces tariffs, subsidies, and import quotas.
C. it has extensive authority to enforce trade practices due to its voluntary membership.
D. it is one of the longest-lasting agreements on trade.
D. it is one of the longest-lasting agreements on trade.
The North American Free Trade Agreement (NAFTA) is between which of the following countries?
A. United States, Brazil, and Canada
B. United States, Mexico, and Brazil
C. United States, Argentina, and Brazil
D. United States, Canada, and Mexico
D. United States, Canada, and Mexico
A patent attorney hired as a specialist to help the entrepreneur obtain a patent would most likely be hire on a:
A. retainer fee
B. success fee
C. out-of-pocket reimbursement
D. one-time fee
D. one-time fee
A _________ is a contract between the government and an inventor.
A. patent
B. franchise
C. trademark
D. trade secret
A. patent
Which of the following is a contract that grants the owner protection, based on the appearance of an object?
A. Utility patent
B. Design patent
C. Plant patent
D. Disclosure document
B. Design patent
The _____ patent is granted for a 14-year term.
A. utility
B. design
C. plant
D. procedure
B. design
The _______ was established to facilitate patent filings in multiple countries.
A. General Agreement on Trades and Tariffs
B. Patent and Trademark Office
C. Sarbanes-Oxley Act
D. Patent Cooperation Treaty
D. Patent Cooperation Treaty
The ________ is filed to establish a date of conception of an invention and replaces what used to be known as a disclosure document.
A. provisional patent
B. defensive document
C. trademark
D. copyright
A. provisional patent
The section of the patent application which provides the criteria by which any infringement will be determined is the:
A. background and advantages section.
B. description of the invention.
C. claims section.
D. executive summary.
C. claims section.
Priceline.com’s service where a buyer can submit a price bid for a particular service is an example of a:
A. utility patent.
B. design patent.
C. business method patent.
D. license.
C. business method patent.
The initial registration for a trademark lasts:
A. 10 years.
B. 14 years.
C. 17 years.
D. 20 years.
A. 10 years.
Which of the following statements is (are) not true?
A. A trademark may be a word, slogan, symbol, design or particular sound.
B. Unlike a patent, trademark does not last indefinitely.
C. It is possible to file for a trademark if you intend to use this mark in the future.
D. There are four categories of trademarks.
B. Unlike a patent, trademark does not last indefinitely.
To apply for a trademark:
A. intent to use the mark is required.
B. the mark must actually have been used on goods.
C. the mark must be copyrighted.
D. the mark must have been used on goods that are already traded.
A. intent to use the mark is required.
It takes approximately ______ to obtain a trademark.
A. 12 months
B. 13 months
C. 14 months
D. 18 months
B. 13 months
Which government office is responsible for the federal registration of trademarks?
A. U.S. Trademark Services
B. Local Chambers of Commerce
C. Patent and Trademark Office
D. Internal Revenue Service
C. Patent and Trademark Office
The entire trademark registration process takes approximately:
A. 7 months
B. 13 months
C. 18 months
D. 2 years
B. 13 months
Once accepted, the trademark is published in the Trademark Official Gazette for ____ days to allow any party to oppose or request an extension to oppose the use of the mark.
A. 10
B. 30
C. 90
D. 180
B. 30
Authors or publishers of software are protected under:
A. copyrights.
B. trademarks.
C. utility patents.
D. trade secrets.
A. copyrights.
Copyrights are registered with:
A. the U.S. Justice Department.
B. the Internet Commission.
C. the GATT.
D. the Library of Congress.
D. the Library of Congress.
Copyrights can protect all of the following except:
A. music.
B. molded plastic parts.
C. sculptures.
D. models.
B. molded plastic parts.
The term of a copyright is the author’s life plus:
A. 20 years.
B. 30 years.
C. 50 years.
D. 70 years.
D. 70 years.
Trade secrets are protected:
A. by the General Agreement on Tariffs and Trade.
B. by federal law.
C. by state law.
D. by the Library of Congress.
C. by state law.
Trade secrets can be protected for:
A. an unlimited period of time.
B. 20 years according to federal law.
C. 14 years according to state law.
D. 50 years if renewed to the maximum allowed, five 10 year renewable terms.
A. an unlimited period of time.
Licensing can be used by the entrepreneur to:
A. protect the Board of Directors from liability.
B. insulate management from liability.
C. protect confidentiality of a trade secret.
D. copy a competitor’s patent.
D. copy a competitor’s patent.
Licensing represents opportunities for:
A. expanding into new markets.
B. reach more customers in existing target markets.
C. an entrepreneur to profit with less risk and costly start-up investment.
D. an entrepreneur to gain access to others’ copyrights, trademarks and patents.
C. an entrepreneur to profit with less risk and costly start-up investment.
The _______ created the commission that prescribes safety standards for products.
A. Consumer Product Safety Act
B. Patent Cooperation Treaty
C. Sarbanes-Oxley Act
D. U.S. Labor Department
A. Consumer Product Safety Act
What type of insurance is mandatory in some states?
A. Property
B. Bonding
C. Life
D. Workers’ Compensation
D. Workers’ Compensation
What type of insurance would cover fire or burglary damage?
A. Property
B. Bonding
C. Life
D. Workers’ Compensation
A. Property
68. Which of the following is true regarding the Sarbanes-Oxley Act?
A. It only applies to companies that make over $10 million in gross revenue.
B. Private companies are not included in this act.
C. The act does not cover fraud via TV or radio.
D. The act only covers a narrow range of corporate governance activity.
B. Private companies are not included in this act.
Which of the following is not a condition that makes a contract legally enforceable?
A. Consideration is given by both parties
B. All parties involved are competent
C. Money is exchanged for products/services
D. Acceptance of the offer must be voluntary
C. Money is exchanged for products/services
What type of agreement must always be in writing in order to be a legally binding contract?
A. Client
B. Distributor
C. Supplier
D. Real estate
D. Real estate
The courts consider oral agreements under $500 binding if:
A. the agreement is for less than one year.
B. the parties have previously done business together.
C. the transaction is for services rendered.
D. the new venture is incorporated.
A. the agreement is for less than one year.
Which of the following is not true about Belinda Guadarrama, featured in the opening profile of chapter 7?
A. She was Hispanic Businesswoman of the year in 2002.
B. She dropped out of high school.
C. She is president and CEO of GC Micro Corporation.
D. Her company has 30 employees and $35 million in revenues.
B. She dropped out of high school
Which of the following statements is (are) true?
A. The business plan describes both internal and external elements.
B. The preliminary business plan should be prepared by a lawyer.
C. Most business plan resources on the Internet are too complex and expensive to be of use to the new venture.
D. Once made, a business plan should not be changed.
A. The business plan describes both internal and external elements.
Which of the following interested parties should not have access to the venture’s business plan?
A. Competitors
B. Lenders
C. Investors
D. Suppliers
A. Competitors
When determining how much help is needed to write the business plan an entrepreneur should conduct a self-assessment. In this self-assessment which skill set would not be considered?
A. product design
B. organizing
C. venture capital
D. people management
C. venture capital
The depth and detail of a business plan depend on:
A. the target audience.
B. the size and scope of the new venture.
C. the experience of the entrepreneur.
D. the amount of capital needed.
B. the size and scope of the new venture
___________ is not one of the main perspectives an entrepreneur should consider when writing the business plan.
A. The employee’s perspective
B. The marketing perspective
C. The investor’s perspective
D. The entrepreneurs own perspective
A. The employee’s perspective
While preparing the first draft of the business plan, the entrepreneur should not:
A. prepare it from his or her personal viewpoint.
B. take into consideration the constituencies that will ultimately read and evaluate the plan’s feasibility.
C. prepare it with an aim to identify possible barriers to success.
D. try to define the goals and objectives of the venture.
B. take into consideration the constituencies that will ultimately read and evaluate the plan’s feasibility.
When evaluating business plans _________ are primarily concerned with the four Cs of credit.
A. investors
B. employees
C. vendors
D. lenders
D. lenders
Investors often place more emphasis on the entrepreneur’s _________ than lenders do.
A. character
B. experience
C. financial records
D. personal viewpoint
A. character
The business plan presentation for potential investors:
A. should be presented only in writing.
B. should contain no negative projections.
C. should enable the entrepreneur to “sell” his or her business concept in a designated period of time.
D. should provide the entrepreneur’s own perspective.
C. should enable the entrepreneur to “sell” his or her business concept in a designated period of time.
Before beginning the business plan, the entrepreneur should define the venture’s goals and objectives. These goals should be:
A. general and broad.
B. feasible.
C. guaranteed.
D. unique.
B. feasible.
_______ and ______ are good sources of information for financial and industry operating ratios.
A. RMA eStatement Studies and BizMiner
B. Market Share Reporter and the SBA report
C. U.S. Census Statistical Abstracts and MarketLine
D. Encyclopedia for American Industries and Mintel Reports
A. RMA eStatement Studies and BizMiner
Which U.S. Census publication gives statistics such as industry outputs, inputs, and operating data on manufacturing activity, by industry groups?
A. Service Annual Survey
B. Current Industrial Report
C. County Business Patterns
D. Annual Survey of Manufacturers
D. Annual Survey of Manufacturers
Which U.S. Census publication provides information about production and shipments on a wide range of products?
A. Service Annual Survey
B. Current Industrial Report
C. County Business Patterns
D. Annual Survey of Manufacturers
B. Current Industrial Report
Which source of financial information is a compilation of 150,000 financial statements of banking customers with ratios and benchmarks?
A. RMA eStatement Studies
B. Market Share Reporter
C. U.S. Census Statistical Abstracts
D. Encyclopedia for American Industries and Mintel Reports
A. RMA eStatement Studies
All of the following would be an operations information need except:
A. raw materials.
B. break even numbers.
C. equipment.
D. labor skills
B. break even numbers.
When collecting marketing information the entrepreneur should:
A. not include general environmental information.
B. start with narrow-based data and work down to a more broader scope of information.
C. identify competitors.
D. not aim to define a specific market.
C. identify competitors.
To assess the potential profitability of a venture, the entrepreneur needs to ascertain expected sales and expense figures for the first:
A. month.
B. year.
C. quarter.
D. three years.
B. year.
Groups of Internet visitors who share opinions and have similar interests are called:
A. page groups.
B. newsgroups.
C. library sources.
D. news homes.
B. newsgroups.
______ represents the newsgroups on the Internet where the entrepreneur can use key words to identify the most appropriate newsgroups.
A. NewsNet
B. YouTube
C. Bebo
D. Usenet
D. Usenet
The usefulness of the title or introductory page is:
A. that it provides information about the company.
B. such that it requires several pages.
C. questionable, especially to investors.
D. that it contains backup data.
A. that it provides information about the company.
Which of the following is not a part of the introductory page?
A. the name and address of the company
B. statement of confidentiality
C. amount of financing needed
D. the names and addresses of all managers
D. the names and addresses of all managers
The executive summary section should:
A. be prepared before the total plan is written.
B. be about two to three pages in length.
C. highlight key financial milestones that have been achieved.
D. try to summarize every section of the plan.
B. be about two to three pages in length.
The section of the business plan in which the entrepreneur identifies changes occurring on the national and international level is the:
A. merchandising plan.
B. description of the venture.
C. executive summary.
D. environmental and industry analysis.
D. environmental and industry analysis.
An assessment of external uncontrollable variables that may impact the business plan is known as:
A. an environmental analysis.
B. a description of the venture.
C. a trend analysis.
D. an executive summary.
A. an environmental analysis.
All of the following are questions that should be considered in the environmental and industry analysis section of the business plan except:
A. What are total industry sales over the past five years?
B. Who are the nearest competitors?
C. What is my promotional strategy?
D. What is anticipated growth in this industry?
C. What is my promotional strategy?
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:
A. organizational plan.
B. description of the venture.
C. production plan.
D. executive summary.
B. description of the venture
All of the following would be considering part of the description of the venture section of the business plan except:
A. the business location.
B. the history of the business.
C. what equipment will be purchased.
D. the projected statement of cash flows for the first year.
D. the projected statement of cash flows for the first year.
If the new venture is a manufacturing operation a(n) __________ in the business plan is necessary.
A. ownership plan
B. quality control plan
C. production plan
D. partnership agreement
C. production plan
71. Which of the following is not true about the operations plan portion of the business plan?
A. Only service businesses need an operations plan.
B. An operations plan describes the flow of goods and services from production to customer.
C. The role of technology in the business transaction process is discussed.
D. The shipping process and inventory control process can be discussed in this section.
A. Only service businesses need an operations plan.
If the new venture is not a manufacturing operation, but a retail store or service, a new section of the business plan is required which is called the:
A. organizational plan.
B. operational plan.
C. production plan.
D. executive summary.
B. operational plan.
Distribution, pricing, and promotion of the product are discussed in which section of the plan?
A. Marketing
B. Production
C. Merchandising
D. Organization
A. Marketing
The organization plan describes the business’:
A. physical plant and machinery layout.
B. location as well as its plant(s).
C. system of distribution.
D. form of ownership.
D. form of ownership.
_______ identifies potential hazards and alternative strategies to meet business plan goals and objectives.
A. Assessment of risk
B. Financial planning
C. Alternative planning analysis
D. The financial plan
A. Assessment of risk
Which of the following documents is not usually included in the Financial Plan?
A. Statement of cash flows
B. Income statement
C. Price lists from suppliers
D. Projected balance sheet
C. Price lists from suppliers
The business plan is designed to guide the entrepreneur:
A. through the distribution process.
B. through the first year of operations.
C. in the financing process.
D. in case of a change in ownership.
B. through the first year of operations.
78. The tendency among many entrepreneurs is to:
A. avoid planning.
B. not take initiative.
C. not market their product or services.
D. lose focus on the business plan.
A. avoid planning.
By controlling __________, the firm can ensure maximum service to the customer.
A. production
B. sales
C. costs
D. inventory
D. inventory
______ control compares the cost figures estimated in the business plan with actual day-to-day operations costs.
A. Production
B. Sales
C. Inventory
D. Costs
A. Production
Which of the following is not a common reason why business plans fail?
A. objectives are not measurable
B. no customer need was established
C. the entrepreneur has no experience in the planned business
D. the promotional strategy was not taken seriously
D. the promotional strategy was not taken seriously
SaleSpider.com was started by:
A. Russell Rothstein
B. Sergy Bryn
C. Mark Zuckerberg
D. Google
A. Russell Rothstein
Which of the following statements is (are) not true?
A. Primary focus of an industry analysis is to provide sufficient knowledge of the environment that can affect marketing strategy decision-making.
B. Industry analysis needs to be conducted using only primary research data.
C. Industry analysis begins with the broadest-based assessment of environmental and industry trends.
D. The information-seeking process of industry analysis is known as an upside-down pyramid.
B. Industry analysis needs to be conducted using only primary research data.
Competitor analysis begins with:
A. gathering samples of the competitors product(s).
B. discovering each competitors advertising budget.
C. documenting the current strategy of each primary competitor.
D. identifying which competitors are most successful.
C. documenting the current strategy of each primary competitor.
_____ is the process of gathering information in order to determine who will buy the product and what is the most appropriate distribution channel.
A. Market segmentation
B. Marketing planning
C. Market mixing
D. Marketing research
D. Marketing research
Marketing research begins with:
A. setting the advertising budget.
B. definition of objectives or purpose.
C. identifying direct marketing strategy.
D. collecting a list of primary and secondary sources of information.
B. definition of objectives or purpose.
Which stage of marketing research is considered to be the most difficult for an entrepreneur due to lack of knowledge or experience in marketing?
A. Analyzing and interpreting the results
B. Gathering data from primary sources
C. Gathering data from secondary sources
D. Defining the purpose or objectives
D. Defining the purpose or objectives
Information that already exists is called:
A. secondary data.
B. primary data.
C. marketing data.
D. target data.
A. secondary data.
Observation, interviewing, and focus groups are examples of collecting:
A. marketing data.
B. primary data.
C. secondary data.
D. target data.
B. primary data.
The simplest approach to gathering primary information is:
A. observation.
B. focus groups.
C. experimentation.
D. interviewing.
A. observation.
The most common approach to gathering primary information is:
A. observation.
B. focus groups.
C. experimentation.
D. interviewing.
D. interviewing.
Which survey method is the fastest method for obtaining data?
A. Telephone
B. Mail
C. Personal
D. Internet
A. Telephone
Which survey method results in the most in-depth information and the best response rate?
A. Telephone
B. Mail
C. Personal
D. Internet
C. Personal
Which survey method results in the worst response rate?
A. Telephone
B. Mail
C. Personal
D. Internet
B. Mail
Which survey method is the most expensive?
A. Telephone
B. Mail
C. Personal
D. Internet
C. Personal
A focus group should consist of:
A. 6-8 potential customers
B. 10-12 potential customers
C. 14-16 potential customers
D. 18-20 potential customers
B. 10-12 potential customers
58. Focus groups:
A. should be led by the entrepreneur.
B. consist of 20 to 30 potential customers.
C. discuss information in a formal and standardized procedure.
D. are an informal method of gathering market information.
D. are an informal method of gathering market information.
Which of the following is not a major question that should be addressed by the marketing plan?
A. Where have we been?
B. Where do we want to go in the short term?
C. Where do we want to go in the long term?
D. How do we get there?
C. Where do we want to go in the long term?
The _________ is the written statement of marketing objectives, strategies, and activities to be followed in the business plan.
A. marketing plan
B. marketing mix
C. marketing system
D. marketing structure
A. marketing plan
The major interacting components that enable a firm to successfully provide products to the marketplace are called the:
A. marketing plan.
B. marketing mix.
C. marketing system.
D. marketing structure.
C. marketing system.
Generally speaking, entrepreneurs see the external environment as:
A. marginally influential.
B. uncontrollable.
C. largely influential.
D. predictable.
B. uncontrollable.
Which of the following is an internal environmental variable?
A. The economy
B. Technology
C. Industry demand
D. Financial resources
D. Financial resources
Financial resources and the management team are both examples of the:
A. external environment.
B. marketing mix decision variables.
C. internal environment.
D. feedback system
C. internal environment.
The four variables that affect short-term marketing decisions are referred to as the:
A. marketing mix.
B. market segment.
C. marketing plan.
D. marketing system.
A. marketing mix.
The marketing mix consists of:
A. product, price, research, and promotion.
B. product, research, distribution, and promotion.
C. product, price, distribution, and promotion.
D. product, price, distribution, and research.
C. product, price, distribution, and promotion.
The __________ is the specific group of potential customers toward which a venture aims its marketing plan.
A. target market
B. external environmental factor
C. channel of distribution
D. consumer market
A. target market
Which is the first step in preparing a marketing plan?
A. Identifying strengths and weaknesses
B. Defining the target market
C. Establishing goals and objectives
D. Defining the business situation
D. Defining the business situation
Market segmentation is the process of:
A. describing market conditions.
B. dividing the market into smaller homogeneous groups.
C. presenting future opportunities.
D. exploring new market opportunities.
B. dividing the market into smaller homogeneous groups.
Once the marketing goals and objectives have been established, the entrepreneur can begin to develop the __________ and __________ to achieve them.
A. marketing plan, industry analysis
B. marketing mix, consumer research
C. marketing strategy, action plan
D. market research, industry analysis
C. marketing strategy, action plan
In establishing goals and objectives, it is important to:
A. quantify all aspects of the goals.
B. limit the number of goals.
C. set standards that are ideal.
D. measure it for control purposes.
B. limit the number of goals.
The number of goals and objectives in the marketing plan should be:
A. 2-4
B. 4-6
C. 6-8
D. 8-10
C. 6-8
Which of the following is (are) not a key element in the pricing strategy?
A. Cost
B. Margin or markup
C. Competition
D. Distribution
D. Distribution
When products cannot be easily differentiated:
A. there is little room for price variations from the competition.
B. a skimming price strategy is appropriate.
C. a higher price can be charged.
D. the lowest possible price must be charged.
A. there is little room for price variations from the competition.
The _________ element of the marketing mix involves decisions as to what is the most appropriate channel.
A. product
B. price
C. distribution
D. promotion
C. distribution
Market conditions, product attributes, cost benefits and venture attributes are all part of which major consideration in channel selection?
A. Degree of directness
B. Number of channel members
C. Criteria in selection of channel members
D. Number of channels
A. Degree of directness
Intensive, selective and exclusive are all part of which major consideration in channel selection?
A. Degree of directness
B. Number of channel members
C. Criteria in selection of channel members
D. Number of channels
B. Number of channel members
Manufacturer’s representatives are marketing middlemen that:
A. take title and physical possession of the product.
B. take physical possession of the product.
C. work exclusively for the entrepreneur.
D. are paid a commission when a sale is made.
D. are paid a commission when a sale is made.
Which form of promotion is too expensive for most entrepreneurs to use?
A. TV
B. Print Ads
C. Radio
D. Webpage
A. TV
Business-to-business marketing involves:
A. sales to households for personal consumption.
B. a more direct channel of distribution than consumer markets.
C. selling products such as household furniture.
D. selling products and services through certified representatives.
B. a more direct channel of distribution than consumer markets.
In business-to-business which advertising and promotion method would be the least likely to be used?
A. Trade magazines
B. Direct sales
C. Trade shows
D. TV ads
D. TV ads
Which of the following is true of implementing a market plan?
A. It is meant to be a tentative plan by the entrepreneur to a specific strategy.
B. It need not be assigned to an individual for coordinating and implementing the plan.
C. It is a formality that serves as a superficial document to outside financial supporters or suppliers.
D. It is a commitment to make adjustments as needed or dictated by market conditions.
D. It is a commitment to make adjustments as needed or dictated by market conditions.
If the entrepreneur is constantly faced with significant changes in the marketing strategy, then it is likely that:
A. there is insufficient monitoring of the plan.
B. the plan was not prepared properly.
C. the business marketing effort does not support the strategy.
D. there have been too many external factors that were difficult to predict.
B. the plan was not prepared properly.
Eric Ryan and Adam Lowry started Method Products because:
A. they were both unhappy in their jobs.
B. a friend tipped them off to market trend of green products.
C. Ryan’s background as a scientist gave him the idea for a clean dish washing liquid.
D. Lowry heard, in his previous job as a marketer, that distributors were looking for green products.
A. they were both unhappy in their jobs.
The management team of a new venture:
A. is encouraged to operate the business as a sideline.
B. must operate the business full-time.
C. can expect to draw a large salary.
D. should be employed elsewhere to assure adequate income.
B. must operate the business full-time.
_____________ have unlimited liability for the actions of the business.
A. Limited liability company members
B. Corporate shareholders
C. General partners
D. Limited partners
C. General partners
In a limited partnership, the limited partners:
A. are liable only for the amount of their capital contributions.
B. share the amount of personal liabilities equally.
C. have only insurance as protection against liability suits.
D. are allowed to decide on the amount of individual liabilities.
A. are liable only for the amount of their capital contributions.
Liability is one of the most critical reasons for establishing a:
A. limited liability company.
B. corporation.
C. partnership.
D. sole proprietorship.
B. corporation.
In a limited liability partnership (LLP) death or withdrawal of a partner:
A. results in automatic transfer of ownership to surviving partner(s).
B. may result in problems trying to find a market for the shares.
C. always results in termination of the partnership.
D. has no effect on the partnership.
D. has no effect on the partnership
Which type of ownership is the least expensive to start?
A. Corporation
B. General partnership
C. Limited partner
D. Sole proprietorship
D. Sole proprietorship
Which type of ownership is the most expensive to start?
A. Corporation
B. General partnership
C. Limited partner
D. Sole proprietorship
A. Corporation
Which of the following types of ownership has the most continuity?
A. General partnership
B. Corporation
C. Limited partner
D. Sole proprietorship
B. Corporation
Sole proprietorships:
A. have no time limit on how long they may exist.
B. are perpetual.
C. continue even upon the death of the owner.
D. allow a member of the deceased partner’s family take over as a partner.
D. allow a member of the deceased partner’s family take over as a partner.
In which of the legal forms of ownership is transferability of interest the easiest?
A. Sole proprietorship
B. Limited partnership
C. General partnership
D. Corporation
D. Corporation
In an S corporation, the transfer of interest can occur:
A. only with the consent of the other shareholders.
B. only if there is a charter provision for doing so.
C. only as long as the buyer is an individual.
D. depending on the agreement.
C. only as long as the buyer is an individual.
The legal form of business with the most alternatives for raising capital is the:
A. proprietorship.
B. corporation.
C. limited partnership.
D. full partnership.
B. corporation.
Bonds can be used to raise capital in which form of ownership?
A. Sole proprietorship
B. Limited partnership
C. General partnership
D. Corporation
D. Corporation
In which form of organization does the owner have greatest control?
A. Sole proprietorship
B. Limited partnership
C. General partnership
D. Corporation
A. Sole proprietorship
When it comes to decision making, in a limited partnership:
A. there is no separation of ownership and control.
B. limited partners have no control over business decisions.
C. limited partners have an equal say, but no liability.
D. the partners have control based on invested capital.
B. limited partners have no control over business decisions.
In which form of organization would it be possible for individuals that don’t have any ownership stake in the business to make decisions?
A. Sole proprietorship
B. Limited partnership
C. General partnership
D. Corporation
D. Corporation
Corporations distribute profits to owners through:
A. bonds.
B. taxes.
C. dividends.
D. interest.
C. dividends.
A_____ can raise capital through bonds, stock and debt.
A. sole proprietorship
B. partnership
C. corporation
D. LLP
C. corporation
Organization costs in a proprietorship are:
A. amortizable over a period of 60 months.
B. not amortizable.
C. amortizable over a period of 45 months.
D. amortizable for a period of a year.
B. not amortizable.
In a ________ capital losses can be carried forward indefinitely.
A. sole proprietorship
B. partnership
C. corporation
D. LLP
A. sole proprietorship
Which for form of organization has time limits on writing off capital losses?
A. partnership
B. corporation
C. sole proprietorship
D. LLP
B. corporation
In what form of business is it most difficult to change your taxable year?
A. sole proprietorship
B. partnership
C. corporation
D. LLP
C. corporation
Which of the following statements is (are) true?
A. Corporations are not able to take deductions and expenses available to the proprietorship or partnership.
B. Distribution of dividends is taxed once, as income of the corporation.
C. Bonuses, incentives, and profit sharing are allowable ways to distribute income of the corporation.
D. Corporate tax may be higher than the individual rate.
C. Bonuses, incentives, and profit sharing are allowable ways to distribute income of the corporation.
Which of the following ways of distributing the income of corporations is taxed twice?
A. Bonus
B. Salary
C. Profit sharing
D. Dividends
D. Dividends
A limited liability corporation:
A. has unlimited liability.
B. is automatically taxed as a partnership.
C. is decreasing in popularity among venture capitalists.
D. had been the most popular choice of organization structure by new ventures and small
B. is automatically taxed as a partnership.
S corporation status means:
A. shareholders do not have limited liability.
B. the corporation is subject to a minimum tax of 34 percent.
C. consent by a majority of shareholders is required for the election of this form of business.
D. the corporation pays no tax.
D. the corporation pays no tax.
In an S corporation:
A. gains or losses of the business are separate from the personal income of the shareholder.
B. shareholders retain unlimited liability.
C. only one class of stock is permitted.
D. most fringe benefits for shareholders can be deducted.
C. only one class of stock is permitted.
In a limited liability company:
A. laws governing its formation differ from state to state.
B. members may transfer their interests at any time.
C. members are not allowed to share income, profit, expense, deduction, loss and credit among themselves.
D. owners are called shareholders.
A. laws governing its formation differ from state to state.
The standard term of a limited liability company is:
A. 15 years.
B. 20 years.
C. 25 years.
D. 30 years.
D. 30 years.
In designing the organization:
A. the initial design is usually complicated.
B. poor design is a significant cause for business failure since the entrepreneur often performs all organization functions themselves.
C. the entrepreneur easily transitions from a growing start-up to a growing, well managed business.
D. as the workload increases the organizational structure will contract.
B. poor design is a significant cause for business failure since the entrepreneur often performs all organization functions themselves.
Our text tells us that much of an entrepreneur’s time during start-up is spent:
A. putting out fires.
B. negotiating.
C. delegating.
D. allocating resources.
A. putting out fires.
Which of the following is not one of the main functions of the management team according to text?
A. Execute the business plan.
B. Identify fundamental changes in the business plan as they occur.
C. Make adjustments based on changes in the environment and market that will maintain profitability.
D. Help the entrepreneur write the business plan.
D. Help the entrepreneur write the business plan.
To build a successful organization culture the entrepreneur:
A. should focus and not try out different things.
B. needs to remember that it is easier to change a person’s attitude than it is to change the person’s behavior.
C. should spend extra time in the hiring process.
D. must create a workplace where communication from the top down is encouraged.
C. should spend extra time in the hiring process.
The board of directors:
A. lacks voting authority.
B. has responsibilities to represent all shareholders.
C. is less objective than the entrepreneur.
D. are always volunteers and need not be compensated.
B. has responsibilities to represent all shareholders.
A board of directors should not:
A. have members with unlimited terms.
B. have an odd number of members.
C. be comprised of external advisors.
D. be compensated with anything other than stock.
A. have members with unlimited terms.
The _________ imposes oversight responsibilities on members of the board of directors.
A. Social Security Act
B. Fair Labor Practices Act
C. Taft-Hartley Act
D. Sarbanes-Oxley
D. Sarbanes-Oxley
The difference between a board of directors and a board of advisors is that:
A. the board of advisors meets less frequently.
B. the board of directors lacks voting authority.
C. the board of directors is subject to less pressure of litigation.
D. the board of advisors are compensated.
A. the board of advisors meets less frequently.
Compensation for board members can take the form of all of the following except:
A. perks, such as vacations.
B. stock.
C. stock options.
D. cash payments.
A. perks, such as vacations.
85. According to Cynthia Kocialski an advisory board should have:
A. 2 members.
B. 4 members.
C. 6 members.
D. 8 members.
C. 6 members.

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