Question 1

________ is a quick financial assessment of the viability of a business idea.

Accepted Answer

A)  Organizational feasibility analysis 
B)  Institutional feasibility analysis 
C)  Product/service feasibility analysis 
D)  Financial feasibility analysis 
E)  Industry/market feasibility analysis 
A)  Organizational feasibility analysis 
B)  Institutional feasibility analysis 
C)  Product/service feasibility analysis 
D)  Financial feasibility analysis 
E)  Industry/market feasibility analysis

Question 2

The most important issues to consider in financial feasibility analysis are:

Accepted Answer

A)  resource sufficiency, industry attractiveness, and total startup cash needed 
B)  total startup cash needed, financial performance of similar businesses, and the overall financial attractiveness of the proposed venture 
C)  target market attractiveness, resource sufficiency, and product/service demand 
D)  total startup cash needed, management prowess, and product/service demand 
E)  concept testing, total startup cash needed, and financial performance of similar businesses 
A)  resource sufficiency, industry attractiveness, and total startup cash needed 
B)  total startup cash needed, financial performance of similar businesses, and the overall financial attractiveness of the proposed venture 
C)  target market attractiveness, resource sufficiency, and product/service demand 
D)  total startup cash needed, management prowess, and product/service demand 
E)  concept testing, total startup cash needed, and financial performance of similar businesses

Question 3

Which of the following is an incorrect approach to administering a concept test?

Accepted Answer

A)  The concept statement shouldn't exceed one page. 
B)  After the concept statement is developed, it should be shown to at least 10 people. 
C)  The best candidates to distribute a concept statement to are family and friends. 
D)  If time permits, a concept statement should be used in an iterative manner and distributed to several groups of people. 
E)  A short survey should be attached to the concept statement to solicit feedback. 
A)  The concept statement shouldn't exceed one page. 
B)  After the concept statement is developed, it should be shown to at least 10 people. 
C)  The best candidates to distribute a concept statement to are family and friends. 
D)  If time permits, a concept statement should be used in an iterative manner and distributed to several groups of people. 
E)  A short survey should be attached to the concept statement to solicit feedback.

Question 4

The temptation to show a concept statement to friends and family members should be avoided because they are predisposed to give positive feedback.

Accepted Answer

A) True 
 B)False

Question 5

________ is the process of determining whether a business idea is viable.

Accepted Answer

A)  Feasibility analysis 
B)  Opportunity recognition 
C)  Viability analysis 
D)  Achievability analysis 
E)  Scenario analysis 
A)  Feasibility analysis 
B)  Opportunity recognition 
C)  Viability analysis 
D)  Achievability analysis 
E)  Scenario analysis

Question 6

Which of the following is not an attribute of an attractive industry?

Accepted Answer

A)  is young rather than old 
B)  is not crowded 
C)  is late rather than early in its life cycle 
D)  is important to the customer 
E)  is fragmented rather than concentrated 
A)  is young rather than old 
B)  is not crowded 
C)  is late rather than early in its life cycle 
D)  is important to the customer 
E)  is fragmented rather than concentrated

Question 7

Which of the following factors is a positive as it pertains to the financial feasibility of a business venture?

Accepted Answer

A)  inconsistent and slow growth in sales during the first five to seven years in a clearly defined market niche 
B)  high percentage of recurring revenue 
C)  inability to forecast income and expenses with a reasonable degree of accuracy 
D)  reliance on externally generated funds to finance and sustain growth 
E)  absence of an existing opportunity for investors to convert equity into cash 
A)  inconsistent and slow growth in sales during the first five to seven years in a clearly defined market niche 
B)  high percentage of recurring revenue 
C)  inability to forecast income and expenses with a reasonable degree of accuracy 
D)  reliance on externally generated funds to finance and sustain growth 
E)  absence of an existing opportunity for investors to convert equity into cash

Question 8

The most important issues to consider in financial feasibility analysis are: financial performance of similar businesses, total cash needed, and:

Accepted Answer

A)  the projected internal rate of return of the proposed venture 
B)  the projected years to an IPO or an acquisition for the proposed venture 
C)  management prowess 
D)  overall attractiveness of the proposed venture 
E)  the projected borrowing power of the proposed business 
A)  the projected internal rate of return of the proposed venture 
B)  the projected years to an IPO or an acquisition for the proposed venture 
C)  management prowess 
D)  overall attractiveness of the proposed venture 
E)  the projected borrowing power of the proposed business

Question 9

The Partnering for Success feature in Chapter 3 focuses on the task of finding the right business partner. According to the feature, which of the following is an incorrect rule-of-thumb in finding a business partner?

Accepted Answer

A)  Know the skills and experiences you need in a partner. 
B)  Make sure you and your partner's work habits are compatible. 
C)  Make sure you and your partner have common goals and aspirations. 
D)  Pick a partner that is similar rather than different from you in terms of skills, abilities, and functional background. 
E)  Hire a lawyer to negotiate the partnership agreement. 
A)  Know the skills and experiences you need in a partner. 
B)  Make sure you and your partner's work habits are compatible. 
C)  Make sure you and your partner have common goals and aspirations. 
D)  Pick a partner that is similar rather than different from you in terms of skills, abilities, and functional background. 
E)  Hire a lawyer to negotiate the partnership agreement.

Question 10

A buying intentions survey is typically administered as part of ________ feasibility analysis.

Accepted Answer

A)  financial 
B)  organizational 
C)  industry/target market 
D)  legal/regulatory 
E)  product/service 
A)  financial 
B)  organizational 
C)  industry/target market 
D)  legal/regulatory 
E)  product/service

Question 11

There are two primary areas to consider in organizational feasibility analysis: management prowess and resource sufficiency.

Accepted Answer

A) True 
 B)False

Question 12

The most important issues to consider in financial feasibility analysis are: total startup cash needed, financial performance of similar businesses, and overall financial attractiveness of the proposed venture.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following items is typically not included in a concept statement?

Accepted Answer

A)  a brief description of the company's management team 
B)  a description of how the product or service will be sold and distributed 
C)  a description of how much money the new venture needs 
D)  the benefits of the product or service 
E)  the intended target market 
A)  a brief description of the company's management team 
B)  a description of how the product or service will be sold and distributed 
C)  a description of how much money the new venture needs 
D)  the benefits of the product or service 
E)  the intended target market

Question 14

Trade journals, industry-related publications, government statistics, and competitors' Web sites are examples of:

Accepted Answer

A)  secondary research 
B)  action research 
C)  principal research 
D)  legacy research 
E)  vertical research 
A)  secondary research 
B)  action research 
C)  principal research 
D)  legacy research 
E)  vertical research

Question 15

Which of the following is not a part of assessing the product/service feasibility of a business idea?

Accepted Answer

A)  buying intentions survey 
B)  gumshoe research 
C)  library research 
D)  analyzing industry attractiveness 
E)  concept test 
A)  buying intentions survey 
B)  gumshoe research 
C)  library research 
D)  analyzing industry attractiveness 
E)  concept test

Question 16

The two components of product/service feasibility analysis are:

Accepted Answer

A)  product/service value and product/service affordability 
B)  product/service demand and product/service timeliness 
C)  product/service timeliness and product/service value 
D)  product/service durability and product/service value 
E)  product/service desirability and product/service demand 
A)  product/service value and product/service affordability 
B)  product/service demand and product/service timeliness 
C)  product/service timeliness and product/service value 
D)  product/service durability and product/service value 
E)  product/service desirability and product/service demand

Question 17

Primary research is research that is collected by the person or persons completing the analysis.

Accepted Answer

A) True 
 B)False

Question 18

The template for completing a feasibility analysis included in Appendix 3.1 of the book is called the ________ analysis.

Accepted Answer

A)  First Evaluation 
B)  Initial Screen 
C)  First Pass 
D)  First Screen 
E)  Flash Screen 
A)  First Evaluation 
B)  Initial Screen 
C)  First Pass 
D)  First Screen 
E)  Flash Screen

Question 19

Which of the following is incorrect regarding the "total startup cash needed" component of financial feasibility analysis?

Accepted Answer

A)  It's not necessary to complete an actual budget of startup expenses. 
B)  When explaining where the startup funds will come from, avoid cursory explanations such as "I plan to bring investors on board" or "I'll borrow the money." 
C)  There are worksheets posted online that help entrepreneurs determine the startup costs to launch their venture. 
D)  An explanation of where the startup funds will come from should be included. 
E)  If the money will come from friends and family or is raised through other means, a reasonable plan should be stipulated to repay the money. 
A)  It's not necessary to complete an actual budget of startup expenses. 
B)  When explaining where the startup funds will come from, avoid cursory explanations such as "I plan to bring investors on board" or "I'll borrow the money." 
C)  There are worksheets posted online that help entrepreneurs determine the startup costs to launch their venture. 
D)  An explanation of where the startup funds will come from should be included. 
E)  If the money will come from friends and family or is raised through other means, a reasonable plan should be stipulated to repay the money.

Question 20

What is gumshoe research and why is it important?

Accepted Answer

Gumshoe research is simply doing what it

________ is a quick financial assessment of the viability of a business idea.

The most important issues to consider in financial feasibility analysis are:

Which of the following is an incorrect approach to administering a concept test?

The temptation to show a concept statement to friends and family members should be avoided because they are predisposed to give positive feedback.

________ is the process of determining whether a business idea is viable.

Which of the following is not an attribute of an attractive industry?

Which of the following factors is a positive as it pertains to the financial feasibility of a business venture?

The most important issues to consider in financial feasibility analysis are: financial performance of similar businesses, total cash needed, and:

The Partnering for Success feature in Chapter 3 focuses on the task of finding the right business partner. According to the feature, which of the following is an incorrect rule-of-thumb in finding a business partner?

A buying intentions survey is typically administered as part of ________ feasibility analysis.

There are two primary areas to consider in organizational feasibility analysis: management prowess and resource sufficiency.

The most important issues to consider in financial feasibility analysis are: total startup cash needed, financial performance of similar businesses, and overall financial attractiveness of the proposed venture.

Which of the following items is typically not included in a concept statement?

Trade journals, industry-related publications, government statistics, and competitors' Web sites are examples of:

Which of the following is not a part of assessing the product/service feasibility of a business idea?

The two components of product/service feasibility analysis are:

Primary research is research that is collected by the person or persons completing the analysis.

The template for completing a feasibility analysis included in Appendix 3.1 of the book is called the ________ analysis.

Which of the following is incorrect regarding the "total startup cash needed" component of financial feasibility analysis?

What is gumshoe research and why is it important?

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Assessing a New Ventures Financial Strength and Viability

Building a New Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters

Exam 3: Feasibility Analysis

________ is a quick financial assessment of the viability of a business idea.

The most important issues to consider in financial feasibility analysis are:

Which of the following is an incorrect approach to administering a concept test?

The temptation to show a concept statement to friends and family members should be avoided because they are predisposed to give positive feedback.

________ is the process of determining whether a business idea is viable.

Which of the following is not an attribute of an attractive industry?

Which of the following factors is a positive as it pertains to the financial feasibility of a business venture?

The most important issues to consider in financial feasibility analysis are: financial performance of similar businesses, total cash needed, and:

The Partnering for Success feature in Chapter 3 focuses on the task of finding the right business partner. According to the feature, which of the following is an incorrect rule-of-thumb in finding a business partner?

A buying intentions survey is typically administered as part of ________ feasibility analysis.

There are two primary areas to consider in organizational feasibility analysis: management prowess and resource sufficiency.

The most important issues to consider in financial feasibility analysis are: total startup cash needed, financial performance of similar businesses, and overall financial attractiveness of the proposed venture.

Which of the following items is typically not included in a concept statement?

Trade journals, industry-related publications, government statistics, and competitors' Web sites are examples of:

Which of the following is not a part of assessing the product/service feasibility of a business idea?

The two components of product/service feasibility analysis are:

Primary research is research that is collected by the person or persons completing the analysis.

The template for completing a feasibility analysis included in Appendix 3.1 of the book is called the ________ analysis.

Which of the following is incorrect regarding the "total startup cash needed" component of financial feasibility analysis?

What is gumshoe research and why is it important?

Introduction to Entrepreneurship

Recognizing Opportunities and Generating Ideas

Writing a Business Plan

Industry and Competitor Analysis

Developing an Effective Business Model

Preparing the Proper Ethical and Legal Foundation

Assessing a New Ventures Financial Strength and Viability

Building a New Venture Team

Getting Financing or Funding

Unique Marketing Issues

The Importance of Intellectual Property

Preparing for and Evaluating the Challenges of Growth

Strategies for Firm Growth

Franchising

Filters