Question 1

Why would someone want to buy an existing business rather than start it from scratch?

Accepted Answer

The answer of Why would someone want to buy an...

Question 2

Which of the following is a contributing factor to the success of a small business?

Accepted Answer

A)  Hard work,drive,and dedication 
B)  Overcapitalization 
C)  Strong control systems 
D)  Undercapitalization 
E)  Insufficient capital

Question 3

What is the difference between a public and a private corporation?

Accepted Answer

A)  Public corporations issue shares whereas private corporations do not. 
B)  Public corporations are owned by a government whereas private corporations are owned by private individuals. 
C)  Public corporations are always large whereas private corporations are not allowed by law to be large. 
D)  Public corporations have articles of incorporation whereas private corporations do not. 
E)  Public corporations issue shares that are widely held whereas private corporations issue shares that are held by only a few people.

Question 4

Which term identifies the arrangement in which a buyer purchases the right to sell the good or service of the seller?

Accepted Answer

A)  Exporter 
B)  Rights marketer 
C)  Franchise 
D)  Importer 
E)  Collateral

Question 5

The franchise agreement usually requires that the franchisee pay a fee to the franchisor,but sometimes it is the other way around.

Accepted Answer

A) True 
 B)False

Question 6

Describe the characteristics of an entrepreneur.

Accepted Answer

The answer of Describe the characteristics of an entrepreneur....

Question 7

The causes of small business failure include poor management skills,inadequate marketing capabilities,and inadequate financial capabilities.

Accepted Answer

A) True 
 B)False

Question 8

The difference between a big business and a small business is clear.

Accepted Answer

A) True 
 B)False

Question 9

Partnerships are often an extension of a business that began as a sole proprietorship.

Accepted Answer

A) True 
 B)False

Question 10

A new venture is a recently formed business that provides goods,but not services,for sale.

Accepted Answer

A) True 
 B)False

Question 11

A private corporation is a business whose stock is held by a small group of related individuals and is available for sale to the general public.

Accepted Answer

A) True 
 B)False

Question 12

Business incubators provide new businesses with support to help them achieve success,but research shows that incubators don't actually increase the chances of success of small businesses.

Accepted Answer

A) True 
 B)False

Question 13

Jim Short and Ron Tall are trying to decide whether to start a new business or buy an existing one.Which of the following would strengthen the case for buying an existing business?

Accepted Answer

A)  The men have lots of ideas regarding the type of business they would like to own. 
B)  They would benefit from the customer base of an existing business. 
C)  An existing business may have difficulties that they would inherit if they bought it. 
D)  Both men value independence. 
E)  Existing small businesses usually have a lot of debt.

Question 14

Due to his hard work and notable contributions as an employee of KB Electronics,Nori has just been elected to the board of directors of the company.He will now be expected to fulfill his obligations as both an employee and director.Nori is a(n)

Accepted Answer

A)  outside director. 
B)  special representative. 
C)  regular seat holder. 
D)  inside director. 
E)  corporate official.

Question 15

Shareholders are ________ of a company and profits are distributed among shareholders in the form of ________.

Accepted Answer

A)  owners; proxies 
B)  owners; more shares of stock 
C)  managers; proxies 
D)  owners; dividends 
E)  managers; profit sharing

Question 16

Which one of the following is not one of the main new venture entry strategies?

Accepted Answer

A)  Develop entirely new products or services 
B)  Introduce a product or service that competes directly with current offerings but has a new twist 
C)  Franchise 
D)  Start a family business 
E)  All of these are new entry strategies

Question 17

Which of the following characteristics is not typical of an entrepreneur?

Accepted Answer

A)  Willing to work hard 
B)  Strong desire for personal freedom 
C)  Enjoys taking a risk 
D)  Creative and venturesome 
E)  Desire to lead a comfortable lifestyle

Question 18

Sole proprietors can generally treat business revenues and operating expenses as part of their personal finances.

Accepted Answer

A) True 
 B)False

Question 19

There are two basic types of partners: ________ and _________.

Accepted Answer

A)  dormant; active 
B)  key; secondary 
C)  secret; open 
D)  general; limited 
E)  primary; secondary

Question 20

Which one of the following is not one of the main new venture entry strategies?

Accepted Answer

A)  Franchise 
B)  Introduce a product or service that competes directly with current offerings but has a new twist 
C)  Test a new marketplace 
D)  Introduce a totally new product or service 
E)  All of these are new entry strategies

Exam 4: Understanding Entrepreneurship, small Business, and New Venture Creation

Why would someone want to buy an existing business rather than start it from scratch?

Which of the following is a contributing factor to the success of a small business?

What is the difference between a public and a private corporation?

Which term identifies the arrangement in which a buyer purchases the right to sell the good or service of the seller?

The franchise agreement usually requires that the franchisee pay a fee to the franchisor,but sometimes it is the other way around.

Describe the characteristics of an entrepreneur.

The causes of small business failure include poor management skills,inadequate marketing capabilities,and inadequate financial capabilities.

The difference between a big business and a small business is clear.

Partnerships are often an extension of a business that began as a sole proprietorship.

A new venture is a recently formed business that provides goods,but not services,for sale.

A private corporation is a business whose stock is held by a small group of related individuals and is available for sale to the general public.

Business incubators provide new businesses with support to help them achieve success,but research shows that incubators don't actually increase the chances of success of small businesses.

Jim Short and Ron Tall are trying to decide whether to start a new business or buy an existing one.Which of the following would strengthen the case for buying an existing business?

Due to his hard work and notable contributions as an employee of KB Electronics,Nori has just been elected to the board of directors of the company.He will now be expected to fulfill his obligations as both an employee and director.Nori is a(n)

Shareholders are of a company and profits are distributed among shareholders in the form of .

Which one of the following is not one of the main new venture entry strategies?

Which of the following characteristics is not typical of an entrepreneur?

Sole proprietors can generally treat business revenues and operating expenses as part of their personal finances.

There are two basic types of partners: and _.

Which one of the following is not one of the main new venture entry strategies?