Exam 14: Accessing Resources for Growth From External Sources

Which of the following is the most significant advantage of an acquisition according to the text?

One important advantage of buying a franchise is that the entrepreneur incurs no risk.

Which statement about capital requirements in franchising is not true?

When an entrepreneur bootstraps the purchase of a company,none of the price of the acquisition is cash.

Negotiating parties will often focus on the distribution task and ignore the integration task.

Idea lab is a combination of an incubator,a venture capitalist,and a business angel.

The concept that "the whole is greater than the sum of its parts" is known as:

In order for a joint venture to be successful:

Quantitative methods of analyzing the fairness of an LBO's asking price include price-earnings ratios,present value of future earnings and book value.

The most common type of joint venture is:

Franchising opportunities have often evolved from changes in the environment as well as important social trends.This is not one of the factors responsible:

A key concern in any merger or acquisition is the legality of the purchase.

In most leveraged buyouts,the equity usually exceeds the debt capital equity by 5:1.

Most ventures that are up for sale have good to very successful profit records.

________ is an arrangement whereby the manufacturer or sole distributor of a trademarked product or service gives exclusive rights of local distribution to independent retailers in return for their payment of royalties and conformance to standardized operating procedures.

One advantage to an acquisition is that there is an established customer base.

By buying a franchise the entrepreneur reduces the amount of money available for advertising.

To be successful the partners in a joint venture should have symmetry.

Brokers for acquisitions represent the buyer,not the seller.

A _________ is a separate entity that involves a partnership between two or more active participants.