Question 1

Janice works in a factory that manufactures decorative accessories for office spaces,hotels,and designer homes.She wants to start her own business because she believes that the market for decorative products has a great growth potential.However,she does not want to depend on anyone else for procuring the initial capital and would like to raise the amount herself.In this scenario,which of the following methods could Janice adopt to raise funds through equity financing?

Accepted Answer

A)  Janice could secure a mortgage from a family member or friend.
B)  Janice could secure a loan from the Small Business Administration.
C)  Janice could ask for a line of credit from her bank.
D)  Janice could invest her savings in the new business.
E)  Janice could ask suppliers for a longer trade credit.F) C) and D)
G) A) and B)

Question 2

In the manufacturing sector,small businesses sometimes have an advantage over large firms because small businesses:

Accepted Answer

A)  are exempted from paying taxes in most countries.
B)  can customize products to meet specific customer needs and wants.
C)  have a better access to highly skilled workers.
D)  can mass produce and supply goods in bulk.
E)  have better access to funds and can invest on sophisticated equipment.F) B) and E)
G) A) and C) B

Question 3

Megha is a taekwondo expert who starts her own martial arts training academy.She conducts taekwondo classes for women and teaches them the art of self-defense.Megha can be regarded as a(n) :

Accepted Answer

A)  shareholder.
B)  entrepreneur.
C)  investor.
D)  intrapreneur.
E)  inventor.F) D) and E)
G) C) and E)

Question 4

In the process of starting a business,the step that immediately succeeds the development of a business plan involves:

Accepted Answer

A)  organizing resources like labor and supplies.
B)  developing some general business ideas.
C)  deciding an appropriate legal form of business ownership.
D)  promoting the business to the customers.
E)  filing for tax returns for the business with the Internal Revenue Service.F) None of the above
G) A) and B)

Question 5

Which of the following traits will help entrepreneurs succeed?

Accepted Answer

A)  Risk aversion
B)  Intolerance
C)  Frugality
D)  Impulsive
E)  NeuroticismF) A) and E)
G) A) and D) C

Question 6

Obtaining money from venture capitalists to start a new business venture is an example of _____.

Accepted Answer

A)  debt financing
B)  bootstrapping
C)  equity financing
D)  mortgaging
E)  factoringF) A) and E)
G) None of the above

Question 7

Entrepreneurship is the process of creating and managing a business to achieve desired objectives.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following statements is true of franchising?

Accepted Answer

A)  An individual only acquires the rights to a name and not the rights to methods of operation.
B)  An individual experiences most freedom in this form of business ownership.
C)  A franchisee receives cash payments from the franchiser on a monthly basis.
D)  A franchisee does not receive accounting support from the franchiser.
E)  A franchisee often receives building specifications and designs from the franchiser.F) B) and D)
G) A) and B)

Question 9

If a small business has to cope with growth,it requires the owner to:

Accepted Answer

A)  give up a certain amount of direct authority.
B)  decrease the levels of management.
C)  disregard narrow niches.
D)  reduce the workforce.
E)  delay decision making.F) D) and E)
G) A) and B)

Question 10

Carol has decided to open a Vietnamese restaurant in her neighborhood.She will be solely responsible for the management of the restaurant.Which of the following problems is she likely to face while running the business?

Accepted Answer

A)  She will find it difficult to make quick decisions.
B)  Her business will not be able to quickly adapt to changing market demands.
C)  Her restaurant may not be able to focus on specific group of customers.
D)  She will not have the flexibility to take critical decisions independently.
E)  She may find it difficult to deal with the stress of rent increase.F) A) and D)
G) A) and C)

Question 11

Which of the following statements is true of baby boomers?

Accepted Answer

A)  They represent people born between 1930 and 1945.
B)  They are economically backward compared to other Americans.
C)  They are not actively pursued by small businesses.
D)  They represent 50 percent of Americans.
E)  They are an unprofitable market segment.F) A) and D)
G) C) and D)

Question 12

Which of the following is one of the commonly reported disadvantages of franchising?

Accepted Answer

A)  Lack of management training and assistance
B)  Decentralized buying power
C)  Low rate of success
D)  Restrictions on purchasing
E)  Lack of financial assistanceF) A) and D)
G) C) and D)

Question 13

Which of the following statements is true of a business plan?

Accepted Answer

A)  Small businesses do not need a business plan.
B)  It does not have to be revised periodically.
C)  Every business needs to mandatorily maintain a business plan as per government regulations.
D)  It should establish a strategy for acquiring sufficient funds to keep a business going.
E)  It is created to limit a business's flexibility and decision-making ability.F) A) and B)
G) B) and D)

Question 14

Which of the following is true of the demographic group Generation Y or millennials?

Accepted Answer

A)  They fail to perform when training sessions combine entertainment with learning.
B)  They mostly represent people born between 1946 and 1964.
C)  They are not solely concerned about money.
D)  They are not concerned about recognition.
E)  They consist of immigrant communities who migrated to the U.S.before 1964.F) A) and B)
G) C) and D) C

Question 15

George is an employee at a company that provides information technology solutions to other firms.Recognizing his potential to innovate,the top management of the company has given him the complete liberty to develop a new smart phone application using the resources of the company.In this scenario,George best illustrates a(n) ____.

Accepted Answer

A)  franchiser
B)  venture capitalist
C)  intrapreneur
D)  category captain
E)  trade creditorF) A) and E)
G) A) and D)

Question 16

Downsizing is an effective way to:

Accepted Answer

A)  gain the advantages of small businesses.
B)  increase organizational tasks.
C)  reduce entrepreneurial spirit among employees.
D)  increase the management layers.
E)  gain employee trust.F) A) and E)
G) B) and C)

Question 17

Which of the following is a drawback of obtaining money from venture capitalists to start a small business?

Accepted Answer

A)  They are not interested in managing or controlling the business.
B)  They require the small-business owner to share the profits of the business with them.
C)  They require that the small business owner mortgage his or her personal property to obtain funds.
D)  They prefer to sell the stock at a low price after the business has grown successful.
E)  They are not interested in claiming ownership of the business.F) D) and E)
G) C) and D)

Question 18

Which of the following reasons makes retailing an attractive industry for small businesses?

Accepted Answer

A)  Retailing eliminates the need for any entrepreneurial skills.
B)  Retailing offers high barriers to entry.
C)  Retailing eliminates the need to engage in active interactions with the final customers.
D)  Retailing requires low initial financing.
E)  Retailing limits a firm's need to focus on specific groups of consumers.F) D) and E)
G) B) and C)

Question 19

A license to sell another's products or to use another's name in business,or both,is called a _____.

Accepted Answer

A)  franchise
B)  cartel
C)  collateral
D)  mortgage
E)  collusionF) A) and E)
G) C) and D)

Question 20

Jacob and Harry are business partners,and their company manufactures portable solar panels.They initially started the business with their savings.However,now the company plans to expand its operations and the required amount of capital cannot be raised through savings or by reinvesting profits.Thus,the partners have decided to sell stock in their business to family members,friends,and employees.Which of the following sources of capital have Jacob and Harry planned to use for the expansion of their business?

Accepted Answer

A)  Debt financing
B)  Bootstrapping
C)  Equity financing
D)  Mortgaging
E)  FactoringF) A) and B)
G) A) and D)

Exam 5: Small Business,entrepreneurship,and Franchising

Correct Answer
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In the manufacturing sector,small businesses sometimes have an advantage over large firms because small businesses:

Correct Answer
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B

Megha is a taekwondo expert who starts her own martial arts training academy.She conducts taekwondo classes for women and teaches them the art of self-defense.Megha can be regarded as a(n) :

Correct Answer
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In the process of starting a business,the step that immediately succeeds the development of a business plan involves:

Correct Answer
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Which of the following traits will help entrepreneurs succeed?

Correct Answer
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C

Obtaining money from venture capitalists to start a new business venture is an example of _____.

Correct Answer
verified

Entrepreneurship is the process of creating and managing a business to achieve desired objectives.

Correct Answer
verified

Which of the following statements is true of franchising?

Correct Answer
verified

If a small business has to cope with growth,it requires the owner to:

Correct Answer
verified

Carol has decided to open a Vietnamese restaurant in her neighborhood.She will be solely responsible for the management of the restaurant.Which of the following problems is she likely to face while running the business?

Correct Answer
verified

Which of the following statements is true of baby boomers?

Correct Answer
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Which of the following is one of the commonly reported disadvantages of franchising?

Correct Answer
verified

Which of the following statements is true of a business plan?

Correct Answer
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Which of the following is true of the demographic group Generation Y or millennials?

Correct Answer
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C

Correct Answer
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Downsizing is an effective way to:

Correct Answer
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Which of the following is a drawback of obtaining money from venture capitalists to start a small business?

Correct Answer
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Which of the following reasons makes retailing an attractive industry for small businesses?

Correct Answer
verified

A license to sell another's products or to use another's name in business,or both,is called a _____.

Correct Answer
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Correct Answer
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Exam 5: Small Business,entrepreneurship,and Franchising

Correct AnswerverifiedShow Answer

In the manufacturing sector,small businesses sometimes have an advantage over large firms because small businesses:

Correct AnswerverifiedB

Megha is a taekwondo expert who starts her own martial arts training academy.She conducts taekwondo classes for women and teaches them the art of self-defense.Megha can be regarded as a(n) :

Correct AnswerverifiedShow Answer

In the process of starting a business,the step that immediately succeeds the development of a business plan involves:

Correct AnswerverifiedShow Answer

Which of the following traits will help entrepreneurs succeed?

Correct AnswerverifiedC

Obtaining money from venture capitalists to start a new business venture is an example of _____.

Correct AnswerverifiedShow Answer

Entrepreneurship is the process of creating and managing a business to achieve desired objectives.

Correct AnswerverifiedShow Answer

Which of the following statements is true of franchising?

Correct AnswerverifiedShow Answer

If a small business has to cope with growth,it requires the owner to:

Correct AnswerverifiedShow Answer

Carol has decided to open a Vietnamese restaurant in her neighborhood.She will be solely responsible for the management of the restaurant.Which of the following problems is she likely to face while running the business?

Correct AnswerverifiedShow Answer

Which of the following statements is true of baby boomers?

Correct AnswerverifiedShow Answer

Which of the following is one of the commonly reported disadvantages of franchising?

Correct AnswerverifiedShow Answer

Which of the following statements is true of a business plan?

Correct AnswerverifiedShow Answer

Which of the following is true of the demographic group Generation Y or millennials?

Correct AnswerverifiedC

Correct AnswerverifiedShow Answer

Downsizing is an effective way to:

Correct AnswerverifiedShow Answer

Which of the following is a drawback of obtaining money from venture capitalists to start a small business?

Correct AnswerverifiedShow Answer

Which of the following reasons makes retailing an attractive industry for small businesses?

Correct AnswerverifiedShow Answer

A license to sell another's products or to use another's name in business,or both,is called a _____.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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B

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C

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C

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