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Chapter 10: Financial Plan:

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The purpose of the pro forma sources and applications of funds is to show how net income and financing were used to increase assets or to pay off debt. True False

Breakeven is the volume of sales a venture needs to make profits. True False

Salaries and wages for the company should reflect the number of personnel employed as well as their role in the organization. True False

Sales revenue for an Internet start-up is often more easier to project. True False

To satisfy outside investors, the financial plan will need two years of past financial data. True False

In the start-up stage where the venture is very small and limited in time and resources: a software program is not required. the software selected can be very simple and easy to use. a software program may cause delays and increase costs. the software should be capable of performing a variety of tasks.

Which of the following would NOT be a current asset? Certificates of deposit that mature in six months Customer receivables Cash Property

Which of the following is an example of cash flow? Payment on a loan Sales Depreciation Use of a credit card

Which among the following is NOT a forecasting technique used to project sales? Survey of buyer's intentions Sales force opinions Monthly disbursements

Time series

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_____ Budgets are used to project cash flows for the cost of goods produced. Capital Operating Production Depreciation

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Chapter: 9 The organizational Plan:


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The leaders of the organization need not always consider themselves role models for their employees. True False

In an S corporation capital gains or losses from the corporation are treated as personal income or losses. True False

The most attractive type of business formation for raising capital is partnership. True False

A sole proprietorship is dissolved in the event of the owner's death. True False

The proprietor is not personally liable for any aspects of the business. True

False

The board of advisors: is subject to regulations stipulated in the Sarbanes-Oxley Act. has no legal status. is not advisable in a family-owned business. is likely to meet more frequently.

In a(n) ______________________, only one class of stock is permitted. sole proprietorship C corporation S corporation partnership

________________ distribute profits to owners through dividends. Sole proprietorship General partnerships Limited partnerships Corporations

In a ______________, bonds can be used to raise capital. corporation limited partnership

general partnership sole proprietorship

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The least expensive form of ownership to start is a: corporation. limited liability company. partnership. sole proprietorship.

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Chapter8 Marketing Plan:


1 If the entrepreneur closely monitors the progress of the existing plan, he or she need not be concerned about contingencies.

True False

2 If the market for a new venture is highly concentrated, it is advisable to consider direct sales.

True False

3 During situation analysis, the entrepreneur should provide a review of past performance of the product and the company.

True False

4 While a marketing plan may enable the entrepreneur to understand and recognize the critical issues, it may not help in the event of any change in the environment.

True False

5 Gathering information from primary sources is the first step in market research.

True False

6 Monitoring ___________ during the implementation of the marketing plan allows the entrepreneur to establish controls on the process.

sales data research data consumer data technical data

7 Advertising and promotion for the business-to-business market involve all of the following EXCEPT:

indirect sales Trade magazine advertising. direct sales. trade shows.

8 What is a target market?

A group of customers a venture reaches by accident. All consumers who purchase the venture's product. A specific group of potential customers toward which a venture aims its marketing plan. A chain of discount stores.

9 Which of the following is NOT a characteristic of a marketing plan?

It should provide a strategy. It should be based on facts and valid assumptions. It should be flexible. It should be long and detailed.

1 Which of the following is NOT an example of collecting primary data? 0

Observation Using the Internet Interviewing Focus groups

Chapter: 7 The business Plan


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1 The venture's form of ownership should be included and described in the production plan

section of the business plan. True False

2 Investors consider the section on description of the venture as important because they can

determine the amount of investment needed without having to read through the entire plan. True False

3 Most entrepreneurs have difficulty with gathering operations information and do not often

know where to begin. True False

4 Potential investors are not very insistent on specifications that need to be included in the

business plan. True False

5 The business plan is an integration of functional plans such as marketing, finance,

manufacturing, and human resources. True False

6 Typically business plan projections are made on a ____________.

bi-monthly schedule quarterly schedule six-month schedule 12-month schedule

7 The names, addresses, and resumes of the directors and officers of the corporation forms part of

the _______________ plan. operations organizational production marketing

8 A production plan usually includes:

pricing. evaluation of the weaknesses of the business. names of suppliers of raw materials. flow of orders for goods and/or services.

9 Raw materials, labor skills, space and location form a part of __________ information needs.

marketing financial operations planning

1 Which of the following is not among the three perspectives that should be considered in 0 preparing a business plan?

marketing perspective perspective of the entrepreneur investor perspective technical perspective

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Chapter: 4

Creativity and the Business Idea:


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1 In the concept stage, the refined idea is tested to determine consumer acceptance.

True False

2 Innovations such as: penicillin, the steam engine, the computer, the airplane, the automobile,

the Internet, and nanotechnology are all classified as technological innovations. True False

3 In the collective notebook method, participants consider the problem and its possible solutions,

recording ideas at least once, but preferably three times, a day. True False

4 Problem inventory analysis involves the identification of everything wrong with an idea,

followed by a discussion of ways to overcome these problems. True False

5 In brainstorming, quality of ideas is desired the fewer the individuals coming up with good

ideas, the greater the likelihood of the emergence of useful ideas. True False

6 __________ is software that accepts product orders and automatically calculates and totals

customers' orders based on the product availability information. Customer feedback software Secure server Shopping cart Credit card payment

7 In which stage is consumer reaction to the physical product/service determined?

Concept Stage Idea Stage Product Development Stage Test Market Stage

8 Which creative problem solving technique develops a new idea by looking at the positives and

negatives? Reverse Brainstorming Free association Attribute listing Big-Dream approach

9 All of the following except _____ is desirable when brainstorming is in process.

idea combination and improvement criticism generating a large quantity of ideas "freewheeling"

1 Which of following creative problem solving method starts with a problem statement that is 0

neither too broad nor too narrow? Brain writing Brainstorming Gordon Method Reverse Brainstorming

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Chapter: 3
Entrepreneurial Strategy: Generating and Exploiting New Entries
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Financial backing is the basis of the entrepreneurial resource. True False

Newness of a new entry is sometimes a disadvantage. True False

First movers face more competitive rivalry. True False

An example of a window of opportunity closing is when another entrepreneur has entered the industry and erected substantial barriers to entry and to imitation. True False

A narrow-scope strategy always provides protection against competition.

True False

Changes needed to adapt to environmental changes: are easier in established organizations because of inertia. can be avoided by late entry. are more difficult because of the entrepreneur's tendency to escalate commitment. don't affect smaller organizations.

Determining first-mover advantage depends on all of the following except: the stability of the environment surrounding the entry. the ability of the company to maintain a legal monopoly in the market. the ability of the entrepreneur to erect barriers to entry and imitation in order to extend the firm's lead time. the ability of the entrepreneur to educate customers.

An entrepreneur who pursues a new entry opportunity only to find out that he or she had overestimated his or her ability to create customer demand is: in error of commission. in technological error. in error of omission. in competition rivalry.

Which of the following statements is true?

Knowledge is a valuable entrepreneurial resource that is typically learned in a classroom. Experience is idiosyncraticunique to the life of the individual. Knowledge based on experience is likely to be learned in a classroom. Financial potential is the basis for a new entry.

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Which of the following is not part of entrepreneurial strategy? Generation of a new entry opportunity. Expansion of an existing opportunity. A feedback loop. Exploitation of a new entry opportunity.

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Chapter: 2
Entrepreneurial Intentions and Corporate Entrepreneurship:
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Most entrepreneurs indicate that they have mentors. True False

An entrepreneur is rarely able to start a new business without some form of formal education. True False

With regard to minority entrepreneurship, in terms of ownership, one study found the lowest participation rate for American Indians. True False

In an encouraging climate for corporate entrepreneurship, rewards should be based on the attainment of established performance goals. True False

An organization that wants to become more entrepreneurial must learn to obtain as many resources as possible in order to be more productive. True False

_____ leads to increased initiative and persistence and thus improved performance. High self-efficacy Perceived desirability High feasibility A strong moral-support system

Entrepreneurial endeavors consist of all of the following key elements except: new business venturing increasing productivity Innovativeness Pro activeness

Motivation to launch a new venture can arise from all of the following except: lack of prior experience. boredom. a lack of challenge. Frustration.

Within the moral-support network, most entrepreneurs indicate that their _____ are their biggest supporters. mentors friends parents spouses

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All these are characteristics of an entrepreneurial environment except: there are short term horizons. new ideas are encouraged. the organization operates on frontiers of technology. it uses a multidiscipline teamwork approach.

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Chapter: 1
Entrepreneurship and the Entrepreneurial Mind-Set:
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While effectuating, entrepreneurs think through a problem in a way that starts with a desired outcome and focuses on the means to generate that outcome. True False

A distribution channel member would typically prefer doing business with single-product, rather than multiproduct firms.

True False

Opportunity assessment plan is more commonly known as business plan. True False

The product development phase begins at the iterative synthesis point. True False

Learning from business failure involves feedback information and entrepreneurial knowledge. True False

Why is the evaluation of an opportunity the most critical element of the entrepreneurial process? It helps the entrepreneur in developing a good business plan. It enables the entrepreneur to judge the market and the competition. It allows the entrepreneur to compare the prospective returns and the resources needed It helps develop the opportunity assessment plan

Which is the most common cause of business failure? Insufficient capital Unstable market Insufficient experience Poor entrepreneurship

Which grief recovery process is based on both avoidance and pro activeness? Restoration-orientation Proactive counseling Loss-orientation Dual process for grief

Which term refers to the process of being proactive towards secondary sources of stress instead of being concerned with loss itself? Grief recovery process Loss-orientation Dual process Restoration-orientation

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What takes place during the product-evolution process? Innovation is developed and commercialized through entrepreneurial activity. The product/service is evaluated and any scope of further development is charted. The business branches into separate units of development and marketing. The product/service is evaluated to identify its global marketability.

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