Deck 3: Competing in the Global Marketplace

Question 1

Norman's interest in computers helped fuel his design of a new hard drive that is far superior to anything on the market.Norman's product and business plan will likely attract several sources of financing if he is willing to give up part ownership of his company.

Answer 1

True

Question 2

Venture capitalists provide funds for startup businesses in exchange for part ownership in the new firm.

Answer 2

True

Question 3

Profits of a sole proprietorship are taxed as a corporation.

Answer 3

False

Question 4

When you are a sole proprietor you are your own boss.

Question 5

Each entrepreneur has very unique characteristics that allow him or her to succeed in business so it is hard to predict who will be a great entrepreneur.

Question 6

Angel investors are the government agencies that invest money in new companies before they go public.

Question 7

An effective business plan analyzes the competition and identifies the resources required to profitably serve a target market.

Question 8

A general partnership is a partnership with one or more partners who invest money in the business and who have unlimited liability.

Question 9

The name given to a person who owns a sole proprietorship is a sole proprietor.

Question 10

An LLC is a form of ownership that involves only one person.

Question 11

Flash lighting means looking carefully at existing inventory to be sure it is all being used efficiently.

Question 12

A general partner is an owner who has unlimited liability and is active in the management of the firm.

Question 13

One characteristic of successful entrepreneurs is that they are self-directed.

Question 14

Unlimited liability refers to the responsibility of business owners for all the debts of the business.

Question 15

A partnership of only limited liability partners will pay higher income taxes.

Question 16

Many people take the risk of becoming an entrepreneur because of the independence it gives them.

Question 17

One advantage of a sole proprietorship is that if you want to get out of business you simply stop.

Question 18

Corporate governance refers to the processes,customs,policies,laws and institutions affecting the way in which a corporation is directed,administered or controlled.

Question 19

People with a burning desire to realize,actualize and build their dreams into reality would likely make successful entrepreneurs.

Question 20

The board of directors is the group ultimately responsible for the business.

Question 21

A business plan is a detailed written statement that describes the nature of the business,the target market,the advantages the business will have in relation to competition and the resources and qualifications of the owner(s).

Question 22

Owners of stock in a C corporation are liable for the debts of the corporation beyond the money they invested.

Question 23

__________ occurs when the owners of the corporation are taxed twice-once when the corporation itself gets taxed and a second time when the dividends are taxed.

Question 24

The advantage of an S Corporation is that it is taxed like a sole proprietorship.

Question 25

One of the biggest advantages of owning a franchise is the marketing and management assistance the owner is given.

Question 26

In business,a market is the place where businesspeople purchase inventory.

Question 27

An angel investor loans businesses his or her own money in return for a stake of the business.

Question 28

A sole-proprietorship is the easiest kind of business to start.

Question 29

Franchises have lower business failure rates than sole proprietors.

Question 30

A venture capitalist will likely take a stake in the business in return for loaning the business money.

Question 31

SBA microloans are given based on the collateral of the borrower.

Question 32

A __________ limited partnership is traded on the stock exchange like a corporation but is taxed like a partnership and thus avoids corporate income tax.

Question 33

A conventional (C)corporation is a state chartered legal entity with the authority to act and have liability separate from its owners.

Question 34

An action-oriented entrepreneur must have a burning desire to realize,actualize and build your own dream into reality.

Question 35

A sole proprietor has limited liability.

Question 36

An S Corporation is created by the government and is taxed like a sole proprietorship and partnership.

Question 37

Businesses usually fail due to over planning.

Question 38

A self-nurturing entrepreneur must believe in his or her own idea even when no one else does.

Question 39

A company store is a retail outlet where employees can shop for everything they need.

Question 40

A franchisee is the person who owns the rights to the franchise.

Question 41

Because of __________ liability each general partner is liable for the debts of the firm,no matter who was responsible for causing those debts.

Question 42

Which of the following types of partnerships limits the partner's risk of losing their personal assets to only their own acts and omissions and to the acts and omissions of people under their supervision?

A) General partnership
B) Limited partnership
C) Master limited partnership
D) Limited liability partnership

Question 43

Which of the following statements about a franchise is most true?

A) One advantage is that the franchisor enjoys the benefits of being the sole proprietor
B) The failure rate of franchises is lower than for sole proprietorships
C) Franchising has low start up costs
D) Franchisors share the profits

Question 44

Stores a chain owns are called ___________ stores.

Question 45

Which of the following is a common characteristic that all successful entrepreneurs have in common?

A) Follows directions extremely well.
B) Pays close attention to what others think of their ideas.
C) Has a burning desire to build their dreams into reality.
D) Can direct people to do the work so that they don't have to work extremely long hours.

Question 46

A (n)________ is the person who buys a franchise.

A) Franchisee
B) Franchisor
C) F-level officer
D) Franchisement owner

Question 47

The responsibility of business owners for all the debts of the business is known as:

A) Limited liability
B) Unlimited liability
C) Limited equity
D) Unlimited indebtedness

Question 48

Which of the following is an advantage of a sole proprietorship?

A) It is easy to get out of business
B) You get to be your own boss
C) You retail all of the profit
D) All of the responses are correct

Question 49

A __________ is a detailed written statement that describes the nature of the business,the target market,the potential for customers,the advantages the business will have in relation to competition and the resources and qualifications of the owner(s).

A) Profit and loss
B) Statement of cash flow
C) Business plan
D) Balance sheet

Question 50

Which of the following is an advantage of a partnership?

A) Increased financial resources
B) Division of knowledge
C) Division of profits
D) Varying points of view about how and where to spend money

Question 51

A(n)______ is the group ultimately responsible for the business.

A) Group of C-level directors
B) Board of directors
C) Angel board
D) Investment bank consortium

Question 52

In franchising,there may be a problem of _________ of existing businesses,because too many stores open us in a small area.

Question 53

_________ refers to the processes,customs,policies,laws and institutions affecting the way in which a corporation is directed,administered or controlled.

A) Corporate administration
B) Corporate rule
C) Corporate governance
D) Corporate responsibility

Question 54

Which of the following is a way to start your own business?

A) Become a franchiser
B) Buy an existing business
C) Start a cooperative
D) All of the responses are correct

Question 55

A(n)__________ consists of people with unsatisfied wants and needs who have both the resources and the willingness to buy.

Question 56

Which of the following is a reason that many people decide to take the risk of becoming an entrepreneur?

A) Opportunity.
B) Independence.
C) Challenge.
D) All of the responses are correct

Question 57

Jerrold Carrington advises that one of the most important parts of the business plan is the:

A) Financial section
B) Explanation of the product/service
C) Executive summary
D) Description of the target market

Question 58

Which of the following forms of business ownership has unlimited liability?

A) General Partnership
B) Limited Partnership
C) Convention Corporation
D) S Corporation

Question 59

Which of the following companies was started by an entrepreneur?

A) DuPont
B) Ford Motor Company
C) Amazon.com
D) All of the responses are correct

Question 60

Which of the following types of business is the easiest to start?

A) Sole proprietorship
B) Partnership
C) S corporation
D) C corporation

Question 61

Explain the common characteristics that all successful entrepreneurs have in common.

Question 62

A _________ is a written document that details the business idea,the target market and the businesses competitive advantage,financial resources available for the business and the qualification of the management.

A) Feasibility product
B) Marketing plan
C) Business plan
D) Statement of intent

Question 63

What are the five main areas of focus when starting a small business?

Question 64

Successful entrepreneurs are self-nurturing.This means they:

A) Look to others for strength and encouragement
B) Self-finance their business with no assistance from others
C) Perform all business operations by themselves
D) Believe in themselves and their ideas

Question 65

Which of the following is a characteristic of successful entrepreneurs?

A) Power-seeking
B) Relies heavily on others who believe in the business
C) Willingness and desire to follow others
D) Action-oriented

Question 66

A ____________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.

A) Market
B) Consumer cooperative
C) Consumer collective
D) Buyer's cooperative

Question 67

A firm or individual providing financial capital to a small business in exchange for an ownership stake in the company is called a(n):

A) Corporate raider
B) Takeover specialist
C) Financial capitalist
D) Venture capitalist

Question 68

Which of the following statements about getting started in your own business is most accurate?

A) You will need to know your market
B) It is best to leave the set up of your accounting system to experts
C) To grow, you will need to learn how to delegate
D) All of the responses are correct

Question 69

List and define three types of business ownership.

Question 70

____________ are private individuals who invest their own money in potentially hot new companies before these firms become larger,publicly traded companies.

A) Leveraged buyout specialists
B) Angel investors
C) Venture capitalists
D) Corporate raider investors

Question 71

Explain the alternatives to starting a business from scratch.

Question 72

Discuss several ways the Small Business Administration assists entrepreneurs.

Question 73

The way to meet customers' needs is to offer:

A) Top quality
B) A fair price
C) Great service
D) All of the responses are correct

Question 74

As a high net worth individual,Denna searches for growth firms in need of additional funding to achieve their goals.In return for this ____________,Denna expects to assume ownership in the business.

A) Analysis
B) Venture capital
C) Corporate loan
D) Securities investment

Question 75

Which of the following explains why individuals accept the risks of business ownership?

A) The potential for learning how to be self-disciplined
B) The sense of self-satisfaction and independence
C) The challenge of seeking power
D) The desire to work fewer hours

Question 76

Entrepreneurship is:

A) Managing businesses for others
B) A controlling interest in the ownership of a corporation
C) Managing businesses that operate in multiple countries
D) Accepting the risk of starting and running a business

Question 77

List and discuss at least three causes of small business failure.

Question 78

In order to finance the Loaf Shop,a mobile bakery business that services several large downtown companies,Missy demonstrated her steadfast desire to get her bakery off the ground by visiting several bankers with:

A) Her insurance agent
B) Her business plan
C) Her venture capitalist
D) Her idea