Question 1

A buy/sell agreement can be used to make certain that funds are available to purchase the ownership interest.

Accepted Answer

A) True 
 B)False  True

Question 2

Depending on the situation, some qualities or characteristics a successor should possess are more important than others.

Accepted Answer

A) True 
 B)False  True

Question 3

The average life expectancy of a privately held business is _____ years.

Accepted Answer

A) 24 
B) 10 
C) an indefinite number of 
D) 50 
A) 24 
B) 10 
C) an indefinite number of 
D) 50 A

Question 4

When looking ahead in choosing a successor from inside the organization, the founder often trains a team of executive managers consisting of both family and nonfamily members.

Accepted Answer

A) True 
 B)False

Question 5

Nonfamily employees sometimes put pressure on the owner/manager in an effort to protect their personal interests.

Accepted Answer

A) True 
 B)False

Question 6

Research on family firms demonstrates which of the following facts?

Accepted Answer

A) Only 16 percent make it to a third generation. 
B) Many family firms cease to exist after one month. 
C) Only 9 out of 10 make it to a second generation. 
D) Only 3 percent make it to the next generation. 
A) Only 16 percent make it to a third generation. 
B) Many family firms cease to exist after one month. 
C) Only 9 out of 10 make it to a second generation. 
D) Only 3 percent make it to the next generation.

Question 7

Most privately held firms

Accepted Answer

A) lack a succession plan. 
B) pass the firm to a child. 
C) don't view succession as a major issue. 
D) leave the succession decision to the executor of the owner's will. 
A) lack a succession plan. 
B) pass the firm to a child. 
C) don't view succession as a major issue. 
D) leave the succession decision to the executor of the owner's will.

Question 8

The Oakland Scavenger Company case may have a major effect on the management succession plans of family business.

Accepted Answer

A) True 
 B)False

Question 9

Barriers to successful succession planning, discussed in the text, include which of the following?

Accepted Answer

A) nobody wanting to own the firm 
B) lack of a final will 
C) death anxiety 
D) lack of profits 
A) nobody wanting to own the firm 
B) lack of a final will 
C) death anxiety 
D) lack of profits

Question 10

It is not necessary for the entrepreneur to seek professional advice and legal counsel when liquidating the firm.

Accepted Answer

A) True 
 B)False

Question 11

Which of the following steps should be carried out third when deciding to sell a business?

Accepted Answer

A) Publicize the offer to sell. 
B) Value the business. 
C) Finalize the prospective buyers. 
D) Time the sale appropriately. 
A) Publicize the offer to sell. 
B) Value the business. 
C) Finalize the prospective buyers. 
D) Time the sale appropriately.

Question 12

Timing considerations generally do not impact decisions to sell a business because triggering events are unanticipated.

Accepted Answer

A) True 
 B)False

Question 13

There are two types of succession pressures: family members and nonfamily employees.

Accepted Answer

A) True 
 B)False

Question 14

The idea of "selling out" should be viewed in a _____ sense.

Accepted Answer

A) destructive 
B) negative 
C) positive 
D) last resort 
A) destructive 
B) negative 
C) positive 
D) last resort

Question 15

Family members who do not play an active role in the business may still want to inherit part of the business.

Accepted Answer

A) True 
 B)False

Question 16

A typical example of a forcing event is a(n)

Accepted Answer

A) mental breakdown. 
B) natural disaster. 
C) IRS audit. 
D) slow business year. 
A) mental breakdown. 
B) natural disaster. 
C) IRS audit. 
D) slow business year.

Question 17

The liquidity event stands for positioning the venture for the realization of a cash return for the owners and investors.

Accepted Answer

A) True 
 B)False

Question 18

A written succession strategy

Accepted Answer

A) is part of an entrepreneur's will. 
B) prepares the entrepreneur for developing a management continuity strategy and policy. 
C) must be reviewed by the government. 
D) must be reviewed by the family. 
A) is part of an entrepreneur's will. 
B) prepares the entrepreneur for developing a management continuity strategy and policy. 
C) must be reviewed by the government. 
D) must be reviewed by the family.

Question 19

The basic rule for privately held businesses is this: The owner should develop a succession plan.

Accepted Answer

A) True 
 B)False

Question 20

Which of the following is not one of the four strategies that can be used in preparing a management succession policy?

Accepted Answer

A) The owner's family controls the management continuity strategy entirely. 
B) The owner controls the management continuity strategy entirely. 
C) The owner works with a professional advisor on the management continuity strategy. 
D) The owner works with his or her family on the management continuity strategy. 
A) The owner's family controls the management continuity strategy entirely. 
B) The owner controls the management continuity strategy entirely. 
C) The owner works with a professional advisor on the management continuity strategy. 
D) The owner works with his or her family on the management continuity strategy.

A buy/sell agreement can be used to make certain that funds are available to purchase the ownership interest.

Depending on the situation, some qualities or characteristics a successor should possess are more important than others.

The average life expectancy of a privately held business is _____ years.

When looking ahead in choosing a successor from inside the organization, the founder often trains a team of executive managers consisting of both family and nonfamily members.

Nonfamily employees sometimes put pressure on the owner/manager in an effort to protect their personal interests.

Research on family firms demonstrates which of the following facts?

Most privately held firms

The Oakland Scavenger Company case may have a major effect on the management succession plans of family business.

Barriers to successful succession planning, discussed in the text, include which of the following?

It is not necessary for the entrepreneur to seek professional advice and legal counsel when liquidating the firm.

Which of the following steps should be carried out third when deciding to sell a business?

Timing considerations generally do not impact decisions to sell a business because triggering events are unanticipated.

There are two types of succession pressures: family members and nonfamily employees.

The idea of "selling out" should be viewed in a _____ sense.

Family members who do not play an active role in the business may still want to inherit part of the business.

A typical example of a forcing event is a(n)

The liquidity event stands for positioning the venture for the realization of a cash return for the owners and investors.

A written succession strategy

The basic rule for privately held businesses is this: The owner should develop a succession plan.

Which of the following is not one of the four strategies that can be used in preparing a management succession policy?

Entrepreneurship Evolutionary Development--Revolutionary Impact

The Entrepreneurial Mind-Set in Individuals: Cognition and Ethics

The Entrepreneurial Mind-Set in Organizations: Corporate Entrepreneurship

Social Entrepreneurship and the Global Environment for Entrepreneurship

Innovation: the Creative Pursuit of Ideas

Assessment of Entrepreneurial Opportunities

Pathways to Entrepreneurial Ventures

Sources of Capital for Entrepreneurial Ventures

Legal Challenges for Entrepreneurial Ventures

Marketing Research for Entrepreneurial Ventures

Financial Preparation for Entrepreneurial Ventures

Developing an Effective Business Plan

Strategic Entrepreneurial Growth

Valuation of Entrepreneurial Ventures

Filters

Exam 15: Harvesting Entrepreneurial Ventures

A buy/sell agreement can be used to make certain that funds are available to purchase the ownership interest.

Depending on the situation, some qualities or characteristics a successor should possess are more important than others.

The average life expectancy of a privately held business is _____ years.

When looking ahead in choosing a successor from inside the organization, the founder often trains a team of executive managers consisting of both family and nonfamily members.

Nonfamily employees sometimes put pressure on the owner/manager in an effort to protect their personal interests.

Research on family firms demonstrates which of the following facts?

Most privately held firms

The Oakland Scavenger Company case may have a major effect on the management succession plans of family business.

Barriers to successful succession planning, discussed in the text, include which of the following?

It is not necessary for the entrepreneur to seek professional advice and legal counsel when liquidating the firm.

Which of the following steps should be carried out third when deciding to sell a business?

Timing considerations generally do not impact decisions to sell a business because triggering events are unanticipated.

There are two types of succession pressures: family members and nonfamily employees.

The idea of "selling out" should be viewed in a _____ sense.

Family members who do not play an active role in the business may still want to inherit part of the business.

A typical example of a forcing event is a(n)

The liquidity event stands for positioning the venture for the realization of a cash return for the owners and investors.

A written succession strategy

The basic rule for privately held businesses is this: The owner should develop a succession plan.

Which of the following is not one of the four strategies that can be used in preparing a management succession policy?

Entrepreneurship Evolutionary Development--Revolutionary Impact

The Entrepreneurial Mind-Set in Individuals: Cognition and Ethics

The Entrepreneurial Mind-Set in Organizations: Corporate Entrepreneurship

Social Entrepreneurship and the Global Environment for Entrepreneurship

Innovation: the Creative Pursuit of Ideas

Assessment of Entrepreneurial Opportunities

Pathways to Entrepreneurial Ventures

Sources of Capital for Entrepreneurial Ventures

Legal Challenges for Entrepreneurial Ventures

Marketing Research for Entrepreneurial Ventures

Financial Preparation for Entrepreneurial Ventures

Developing an Effective Business Plan

Strategic Entrepreneurial Growth

Valuation of Entrepreneurial Ventures

Filters