Question 1

Penelope is a very talented software engineer who starts her own small software development firm.She finances the firm from her savings.Initially,she is able to get many projects from customers and completes them successfully.However,as her business grows,she fails to make good decisions in hiring new employees,billing the clients,and negotiating prices.She eventually ends up liquidating the business.Which of the following causes of small-business failure does this scenario best illustrate?

Accepted Answer

A)  Undercapitalization
B)  Managerial inexperience
C)  Economies of scale
D)  Debt financing
E)  Debt factoringF) A) and B)
G) A) and E)

Question 2

A loan is taken by a small business is referred to as a mortgage:

Accepted Answer

A)  when the small-business owner has to share profits and ownership with the investors.
B)  when the small business fails to repay the loan.
C)  when the small business has to sell its stock to outsiders.
D)  when the small-business owner has to provide personal property as collateral.
E)  when the small business borrows interest-free capital.F) C) and D)
G) B) and E)

Question 3

A good business plan should:

Accepted Answer

A)  limit a business's flexibility.
B)  act as a guide or a reference document.
C)  never be revised.
D)  avoid including estimates of income and expenses.
E)  limit a firm's decision making ability.F) C) and D)
G) A) and B)

Question 4

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

Accepted Answer

A)  Flexibility in decision making
B)  No restrictions on purchasing
C)  Management training and support
D)  No standardized procedures of operations
E)  Decentralized buying powerF) B) and D)
G) A) and C)

Question 5

Neehara recently opened a premium bakery.She did not have enough savings and hence she applied for a loan to obtain the additional funds required to start the bakery.She had to provide her house as collateral to obtain the loan.The type of financing obtained by Neehara can be regarded as a _____.

Accepted Answer

A)  mortgage
B)  trade credit
C)  mutual fund
D)  non-recourse loan
E)  dividendF) B) and D)
G) A) and D)

Question 6

Which of the following demographic trends has made health care and financial planning industries attractive for small businesses in the United States?

Accepted Answer

A)  Decreasing population of millennials
B)  Increasing income among Generation X
C)  Increasing aged baby boomers who are wealthy
D)  Reducing entrepreneurial spirit among young generations
E)  Increasing imports into the economyF) A) and D)
G) A) and C)

Question 7

Anisha,an entrepreneur,starts a real estate firm with very limited funds.In order to conduct business,she purchases a few laptops,LED screens,and other office equipment from a local electronics wholesaler.The wholesaler understands her financial situation and allows her to pay for the goods in installments.In this scenario,the type of funding obtained by Anisha can be regarded as a _____.

Accepted Answer

A)  line of credit
B)  trade credit
C)  business subsidy
D)  non-recourse loan
E)  working capital loanF) C) and D)
G) A) and B)

Question 8

Which of the following is an advantage of small businesses over larger firms?

Accepted Answer

A)  Unlike larger firms,small businesses can quickly make and execute business decisions.
B)  Unlike larger firms,small businesses have access to a diverse and large workforce.
C)  Unlike larger firms,small businesses are not required to pay any taxes.
D)  Small businesses are better equipped than larger businesses to cope with growth.
E)  Small businesses have better access to highly trained and competent staff than larger firms.F) C) and D)
G) B) and D)

Question 9

Persons or organizations that agree to provide some funds for a new business in exchange for ownership interest or stock are called _____.

Accepted Answer

A)  intrapreneurs
B)  category captains
C)  venture capitalists
D)  trade debtors
E)  franchisersF) A) and E)
G) A) and B)

Question 10

Millennials number around 75 million and represent a huge business opportunity in the United States.Which of the following is a defining feature of the millennials?

Accepted Answer

A)  Baby boomers above the age 50
B)  First generation immigrants
C)  People born at the turn of the millennium between 1999 and 2001
D)  People from immigrant communities who migrated to the U.S.between 1946 and 1964
E)  People born between 1977 and 1994F) B) and E)
G) B) and D)

Question 11

Which of the following is a reason behind the failure of small businesses?

Accepted Answer

A)  Overcapitalization
B)  Reputation
C)  Managerial experience
D)  Poor business concept
E)  High costs of start-upF) C) and D)
G) A) and B)

Question 12

Norton is a human resource manager at a large multinational company.After a drastic drop in revenue,his company thinks of ways to correct the situation.At a meeting with the top management,the CEO suggested that the company should reduce its workforce by 20 percent.This move would help the company cut costs and continue functioning on the current projects.In this scenario,which of the following strategies is Norton's company planning to use?

Accepted Answer

A)  Off shoring
B)  Outsourcing
C)  Crowd sourcing
D)  Franchising
E)  DownsizingF) A) and B)
G) B) and D)

Question 13

Which of the following is an advantage of a small business?

Accepted Answer

A)  Greater adaptability to changing market demands
B)  Highly trained and competent staff
C)  Low levels of stress in managing the business
D)  Diverse and large workforce
E)  High success ratesF) A) and B)
G) C) and D)

Question 14

One of the major reasons people want to own and operate their own business is to:

Accepted Answer

A)  avoid the risk of competition.
B)  be their own boss.
C)  avoid multitasking.
D)  reduce stress levels.
E)  avoid direct responsibility of the operations.F) A) and C)
G) B) and E)

Question 15

Andrew,a pharmacist,realized that he should stock extra supplies of a particular medicine to respond to an outbreak of a particular infection in the city.Lacking sufficient capital to purchase the extra inventory,he borrowed a predetermined sum of money from his bank.Which of the following sources of funding does this scenario best illustrate?

Accepted Answer

A)  Trade credit
B)  Initial public offering
C)  Venture capital
D)  Equity financing
E)  Line of creditF) A) and B)
G) B) and E)

Exam 5: Small Business,entrepreneurship,and Franchising

Correct Answer
verified

Millennials number around 75 million and represent a huge business opportunity in the United States.Which of the following is a defining feature of the millennials?

Correct Answer
verified

A loan is taken by a small business is referred to as a mortgage:

Correct Answer
verified

Neehara recently opened a premium bakery.She did not have enough savings and hence she applied for a loan to obtain the additional funds required to start the bakery.She had to provide her house as collateral to obtain the loan.The type of financing obtained by Neehara can be regarded as a _____.

Correct Answer
verified

One of the major reasons people want to own and operate their own business is to:

Correct Answer
verified

Which of the following is a reason behind the failure of small businesses?

Correct Answer
verified

A good business plan should:

Correct Answer
verified

Which of the following is an advantage of small businesses over larger firms?

Correct Answer
verified

Which of the following is an advantage of a small business?

Correct Answer
verified

Which of the following demographic trends has made health care and financial planning industries attractive for small businesses in the United States?

Correct Answer
verified

Persons or organizations that agree to provide some funds for a new business in exchange for ownership interest or stock are called _____.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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

Correct Answer
verified

Exam 5: Small Business,entrepreneurship,and Franchising

Correct AnswerverifiedShow Answer

Millennials number around 75 million and represent a huge business opportunity in the United States.Which of the following is a defining feature of the millennials?

Correct AnswerverifiedShow Answer

A loan is taken by a small business is referred to as a mortgage:

Correct AnswerverifiedShow Answer

Neehara recently opened a premium bakery.She did not have enough savings and hence she applied for a loan to obtain the additional funds required to start the bakery.She had to provide her house as collateral to obtain the loan.The type of financing obtained by Neehara can be regarded as a _____.

Correct AnswerverifiedShow Answer

One of the major reasons people want to own and operate their own business is to:

Correct AnswerverifiedShow Answer

Which of the following is a reason behind the failure of small businesses?

Correct AnswerverifiedShow Answer

A good business plan should:

Correct AnswerverifiedShow Answer

Which of the following is an advantage of small businesses over larger firms?

Correct AnswerverifiedShow Answer

Which of the following is an advantage of a small business?

Correct AnswerverifiedShow Answer

Which of the following demographic trends has made health care and financial planning industries attractive for small businesses in the United States?

Correct AnswerverifiedShow Answer

Persons or organizations that agree to provide some funds for a new business in exchange for ownership interest or stock are called _____.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

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

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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