MGT190-SP. ENTREPRENEURSHIP (MGT190-SP)Take Assessment: MGT 190 Exam 3
Question 1Companiesthat make the best candidates for direct public offerings (DPOs):a. have theability to meet the same requirements as companies making stock offeringsusing moretraditional methods.b. have highname recognition and a loyal customer base.c. usuallyare simple, one-product companies.d. All ofthe above.
Question 2To financeher inventory of cars, auto dealer Sarah Ann Lopez would most likely rely on whichtype of loan?a.commercial bank loanb. line ofcreditc. floorpland.installment loan
Question 3For which ofthe following businesses would clustering be an effective location strategy?a. a cardealershipb. a flowershopc. asporting goods stored. a drycleaner
Question 4__________are domestic wholesalers who do business in foreign markets, buying goods frommany domestic manufacturers (often competitors) and then marketing them inforeign countries.a. Exporttrading companies (ETCs)b. Exportmanagement companies (EMCs)c. Exportmerchantsd. Residentbuying offices
Question 5A(n)__________ is a combination of hardware and software operating between theInternet anda company?s computer network that allows employees to have access tothe Internetbut keeps unauthorized users from entering the company?s network andthe programsand the data it contains.a. virusdetection programb. firewallc. intrusiondetection programd. hackerblock
Question 6The averagesuccess rate of joint ventures is __________ percent , while its averagelife is__________ years.a. 81; 20b. 62; 10.5c. 43: 3.5d. 25; 1.5
Question 7Which of thefollowing statements concerning financing a small business is true?a. Choosingthe right sources of capital for a business can be just as important aschoosing the right form of ownership or the right location because of thelong-term impact it has on a company.b. When itcomes to attracting capital for launching or expanding a business, creativity counts;entrepreneurs must use as much ingenuity in financing their businesses as theydoingenerating their product or service ideas.c. Beforeaccepting startup money, entrepreneurs must take into account the“chemistry”betweenthemselves, their companies, and their funding sources, making sure that thematch is agood one.d. All ofthe above.
Question 8A businessowner seeking money to purchase a building and the equipment needed to launch awelding shop would need which kind of capital?a. Fixedb. workingc. growthd.disposable
Question 9When BlueFish Clothing decided to raise money for growth and expansion by selling sharesof company stock straight to investors without relying on an investment banker (orunderwriter), the company was making which kind of stock offering?a. Rule 147b. directstock offeringc.Regulation S-Bd.Best-efforts stock offering
Question 10TheAmericans with Disabilities Act (ADA):a. appliesto every business, whatever its size.b. requirescompanies to make expensive changes to their work environments and storestoaccommodate disabled workers and customers.c. requiresmost businesses to make their facilities available to physically challengedcustomersand workers.d. requiresbusinesses in all multistory buildings to have elevators.Question 11In a_________ layout, a manufacturer groups workers and equipment according to theirgeneral function.a. processb. productor linec. fixedpositiond.functional
Question 12The typicalventure capital company receives more than 1,200 business plans each year, andultimately invests in __________ of them.a. 3 to 6b. 15 to 20c. 30 to 35d. about 100
Question 13The firstplace entrepreneurs in search of startup funds should look is:a. their ownpockets.b. relativesand friends.c. venturecapitalist firms.d. angels.
Question 14Domain namescan be registered with the U.S. Patent and Trademark Office.TrueFalse
Question 15__________banks are most likely to lend money to small businesses.a. Smallb. Largec.Internationald. Foreign
Question 16The mostimportant ingredient in the recipe for a successful joint venture is:a.negotiating an iron-clad contract that binds both parties.b. choosingthe right partner.c. seeingthe joint venture for what it really is: a chance for both parties to makelargeprofits byjoining forces.d. to builda monopoly in the target country.
Question 17Anentrepreneur who wants to open a bed and breakfast inn in an area that is zoned“residential” is going before the local zoning board seeking a(n)__________, a special exemption to the zoning ordinance that would allow her tolocate her business in this area.a. exceptionb. variancec. redemptiond. exclusion
Question 18The ArthurAndersen/MassMutual Survey of American Family Businesses reports that __________percent of small business owners have written estate plans.a. 25b. 40c. 55d. 75
Question 19Which of thefollowing statements concerning global trade is true?a. Today,the global marketplace is as much the territory of small, upstart companies asitis that ofgiant multinational corporations.b.Ninety-six percent of the world’s population and 67 percent of the world’spurchasingpower lieoutside the borders of the United States.c. Smallcompanies that export grow more rapidly than those that operate domestically only.d. All ofthe above.
Question 20Whenfinancing a business startup with angel financing, entrepreneurs should rememberthat:a. angelsare most likely to finance startups in the $5 to $10 million range.b. angelsare willing to wait no more than two years to “cash out” theirinvestments andexpect toearn at least 60 to 75 percent returns annually.c. angelsusually invest their money locally, so it is wise to look close to home forthem -usually within a 50-to 100-mile radius.d. All ofthe above.
Question 21Whensearching for a location, a company that develops computer software for the entertainmentindustry would be interested in studying which of the following factorsabout thelabor supply in a particular area?a. thenumber of workers availableb. the levelof education, training, and experience of the workforcec. theprevailing wage rate in the aread. All ofthe above
Question 22Research byBizRate.com found that __________ percent of Web shoppers who fill their onlineshopping carts become frustrated and leave the site before checking out.a. 15b. 25c. 55d. 75
Question 23The ideal domainname for a company’s Web site should be:a. short.b.indicative of the company’s business or business name.c. easy tospell.d. all ofthe above.
Question 24Which of thefollowing statements concerning asset-based loans is false?a. The mostcommon types of asset-based loans are discounting accounts receivable andinventoryfinancing.b. Becauseof its efficiency and low cost, asset-based loans are an ideal source oflong-termfinancing.c. A smallcompany that qualifies for a $1 million line of credit would be able to borrowasmuch as $3million using asset-based loans.d. All ofthe above
Question 25_________are trade intermediaries that work on a buy-and-sell arrangement, play the roleof an independent international marketing department, and are an importantchannel offoreign distribution for small companies just getting started in internationaltrade.a. Exporttrading companies (ETCs)b. Exportmanagement companies (EMCs)c. Residentbuying officesd.Government buying offices
Question 26The biggestbarrier to exporting facing small companies that have never exported is:a. notknowing how or where to start.b.government regulations that make it nearly impossible for small companies toexport.c. the lackof products and services that would sell successfully in foreign markets.d. intensecompetition in international markets from major multinational corporations.
Question 27The mostpopular loan program sponsored by the Small Business Administration (SBA) is:a. Low DocProgramb. ExportWorking Capital Programc. 7(a) LoanGuaranty Programd. All ofthe above
Question 28In a_________ layout, a manufacturer arranges workers and equipment according to thesequence of operations.a. processb. productor linec. fixed positiond.functional
Question 29Anentrepreneur trying to find a location for a sporting goods store has decidedto use the index of retail saturation as a guide. She knows that Site 1 has atrading area with 42,374 potential customers who spend an average of $87.50 onsporting goods per year. The only competitor in the trading area has 16,000square feet of selling space. Site 2 has 38,649 potential customers spending anaverage of $91.25 per year on sporting goods. In this trading area, two competitorsoccupy 17,100 square feet of space. The index of retail saturation for Site 1is:a. 182.86b. 206.24c. 231.73d. None ofthe above.
Question 30Smallcompanies that operate globally are able to:a. offsetsales declines in the domestic market.b. extendtheir products’ life cycles.c. raisetheir levels of quality and customer-orientation.d. All ofthe above.
Question 31More than__________ percent of all companies in the United States are familyowned.a. 20b. 40c. 60d. 90
Question 32__________items are best suited for selling on the World Wide Web.a.high-volumeb.low-marginc. commodityd. all ofthe above.
Question 33Under NAFTA,companies have greater protection of their patents, trademarks, and copyrightsacross national borders.TrueFalseQuestion 34Smallcompanies account for __________ percent of the companies involved in exporting,and they generate about __________ of the dollar value of the nation’s exports.a. 20;one-fifthb. 45; onetenthc. 58;two-thirdsd. 97;one-third
Question 35A __________is an exemption from the Security and Exchange Commission’s full-blownregistration process that is designed to make it easier and less expensive for smallcompanies to make initial public offerings. The ceiling on this type of issueis $1 million, and the price of the shares must be at least $5.a.Regulation S-Bb.Regulation Ac. SmallCompany Offering Registration (SCOR)d. DirectPublic Offering
Question 36When a bankbecomes a __________ lender under the Small Business Administration’s loanprogram, the bank makes the final decision on a small company’s loanapplication (subject only to review by the SBA) but still receives the securityof the SBA’s loan guarantee.a. certifiedb. preferredc.authorizedd. conferred
Question 37Shoppingmalls typically average __________ parking spaces per 1,000 square feet ofshoppingspace.a. 2b. 5c. 10d. 16Question 38A survey byGTE Superpages.com found that __________ percent of small businesses do nothave Web sites.a. 10b. 30c. 55d. 75
Question 39The simplestand least expensive way for a small business to begin conducting businessglobally is to:a. establisha site on the World Wide Web (WWW).b. launch anexport program.c. set up aforeign joint venture with a company in another country.d. establisha location in a foreign country.
Question 40A companymust file a __________ describing both the company and the stock offering withthe Securities and Exchange Commission (SEC) before making an initial publicoffering.a. lockupagreementb. letter ofintentc. statementof corporate standingd.registration statement
Question 41In America,business people expect to do business quickly and typically do not waste time“getting down to business.” In other countries around the world,however, closing a deal typically takes much longer. In which country would anAmeric
an entrepreneur need a large dose of patience when conducting business?a. Spainb. Chinac. Japand. All ofthe above
Question 42Smallbusinesses on the Web are better able to compete if they focus on a niche market.TrueFalse
Question 43AlexandraHudson, owner of a company that manufactures high quality wood furniture hasforged a long-term partnership with an upscale furniture wholesaler in Denmarkto sell her company’s products in that country. The Danish wholesaler hasagreed tohandle thedistribution details and to provide design ideas to help Hudson’s companycreate newstyles that will appeal to Danish customers in exchange for some priceconcessions.The relationship between the two companies began when arepresentativeof the Danish furniture wholesaler contacted Hudson through Hudson’sWorld WideWeb site. Hudson and the Danish company have formed a:a. foreignjoint venture.b. adomestic joint venture.c.countertrading relationship.d. foreignlicensing arrangement.
Question 44Onlinenewsletters should be kept to about:a. 600 wordsb. 2000wordsc. 6 pagesd. 20 pages
Question 45In aperformance appraisal, a manger should:a. keepcomments as general as possible to avoid upsetting workers.b. use thetime to spring several “surprises” (both good and bad) on employeesabout their performances over the past year.c. critiqueemployees’ attitudes and abilities rather than their actions.d. spendabout 20 percent of the time discussing past performance and use the remaining 80percent of the time to develop goals and plans for the future.
Question 46Which areaof a retail store would be least valuable?a. the mainfloor in a multistory buildingb. theintersection of two primary aislesc. the rightrear corner of a stored. the rightfront corner of a store
Question 47Column AColumn Bpeoplethingsvisionlogistics toward the visiondoing theright things doing things rightcomes firstcomes second
Column Adeals with __________, and column B deals with __________.a. staffing;leadershipb.leadership; staffingc.management; leadershipd.leadership; management
Question 48Which of thefollowing is an effort by the Small Business Administration (SBA) to speedupprocessing times and streamline the process for its loan applications?a. PreferredLender Programb. Low DocLoan Programc.SBAExpress Programd. All ofthe above
Question 49The mostpopular estate planning technique among business owners is the:a. buy/sellagreement.b. grantorretained annuity trustc. estatefreezed. familylimited partnership
Question 50Studies showthat __________ percent of first-generation family businesses fail tosurvive intothe second generation, and of those that do survive, __________ make itto the thirdgeneration.a. 20; 81b. 40; 75c. 70; 12d. 90; 24
Question 51__________offer many of the same kinds of loans that commercial banks do, but they arewilling to tolerate more risk in their loan portfolios than banks and often usesome type of asset-based lending when making commercial loans.a. Insurancecompaniesb. Stockbrokerage housesc.Commercial finance companiesd. Creditunions
Question 52Experts drawan analogy between today’s successful small business leader and:a. theconductor of a symphony orchestra.b. theleader of a jazz band.c. a memberof a rock and roll band.d. a chambermusic concert group.
Question 53A __________is relatively small, containing from three to twelve stores and serving a populationof up to 40,000 people who live within a 10-minute drive.a.neighborhood shopping centerb. communityshopping centerc. regionalshopping malld. powercenter
Question 54The centralbusiness district (CBD) in most cities is characterized by:a. theability to draw customers from the entire trading area of the city.b. trafficcongestion.c.inadequate parking facilities.d. All ofthe above
Question 55Whencreating a Web site, the best approach is:a. Get thesite online and then tweak it, change it, and update it based on what isworking best.b. Don’tlaunch a Web site until it is absolutely perfect.c. Theflashier a Web site is the better it is.d. All ofthe above.
Question 56The averageWeb user spends nearly __________ hours online each week.a. 2b. 6c. 16d. 25
Question 57Which of thefollowing statements concerning business location is false?a. Analyzingthe characteristics of an area’s residents gives entrepreneurs the facts theyneed to makean informed location decision.b.Assembling a demographic profile helps entrepreneurs determine how well aparticularsitemeasures up to their market profile.c.Entrepreneurs should avoid locating their businesses near competitors.d.Population density is an important location factor, especially for businessesthatdepend onhigh traffic for their success.
Question 58A(n)__________ minimizes estate taxes on a business by creating two classes of stock:preferred voting stock (the value of which remains constant) for the parents,and nonvoting common stock (the value of which reflects the increased value ofthe business) for the children.a. familylimited partnershipb. estatefreezec. buy/sellagreementd. grantorretained annuity trust
Question 59Thisfinancing program spans 11 government agencies and is designed to encourage smallcompanies to expand their research and development efforts in science and engineeringand to develop new commercial products and services from those efforts.a. SmallBusiness Innovation Research Programb. SmallBusiness Technology Transfer Programc. CertifiedDevelopment Company Programd. UrbanDevelopment Action Grant Program
Question 60Expertsestimate that __________ of the products U.S. companies export to other nationsrequire little modification to sell in foreign markets.a. one-tenthb.one-fourthc. one-thirdd. one-half
Question 61The firstand foremost obstacle an entrepreneur must overcome to become a truly globalbusiness is:a. findingthe financing to establish an export program.b. learningto think globally.c. locatinga foreign partner to help navigate the market successfully.d. adaptingthe product or service to suit the tastes, preferences, and customs of foreign markets.
Question 62Web-basedselling enables small businesses to:a. increasetheir revenues.b. expandtheir reach into global markets.c. lower thecost of doing business.d. all ofthe above
Question 63Retailcustomers on the Web demand:a. goodproduct selection at competitive pricesb.well-designed product presentationsc. easyordering with fast and reliable shipping and handlingd. All ofthe above.
Question 64Job__________ involves building motivators into a job by increasing the planning, decisionmaking, organizing, and controlling functions workers perform.a.simplificationb.enlargementc.enrichmentd. rotation
Question 65Created in1947, this became the first global tariff agreement, and, today, it includes124countries that account for nearly 90 percent of world trade.a. NAFTAb. WTOc. GATTd. NATO
Question 66A __________trust is a special type of irrevocable trust that has become one of themost populartools for entrepreneurs seeking to transfer ownership of their companieswhilemaintaining control over it and minimizing their estate taxes.a. bypassb.irrevocable life insurancec.irrevocable assetd. grantorretained annuity trust
Question 67Which of thefollowing statements concerning the interview process is false?a. To avoidthe threat of lawsuits, business owners should ask only questions calling for“yes/no”answers.b. Creatinghypothetical situations candidates would be likely to encounter on the job andasking howthey would handle them gives insight into their work habits and attitudes.c. Develop aseries of core questions and ask them of every candidate.d. Businessowners should ask candidates about a recent success and a recent failureand thenlook for those who describe them both with equal enthusiasm.
Question 68Businessincubators:a. combinelow-cost, flexible rental space with a multitude of support services for theirsmallbusiness residents.b. givesmall companies a greater chance for success by offering them valuable businessservices aswell as connections to funding sources and management consulting.c. improvetheir residents’ survival rates;d. All ofthe above.
Question 69A privacypolicy is a critical component of a well-designed Internet business strategy.TrueFalse
Question 70A smallcompany using factoring would prefer which type of factoring arrangement?a. withrecourseb. withoutrecoursec. exemptedd. None ofthe above. A small company should never use factoring as a source offinancingbecause of its excessively high risks and costs.
Question 71When aspeaker sends conflicting verbal and nonverbal messages, listeners are most likelyto believea. theverbal messageb. thenonverbal messagec. neitheroned. none ofthe above.
Question 72Regularspecial offers that are available only to Web customers will annoy most shoppers.TrueFalse
Question 73Anentrepreneur trying to find a location for a sporting goods store has decided touse the index of retail saturation as a guide. She knows that Site 1 has atrading area with42,374potential customers who spend an average of $87.50 on sporting goods peryear. Theonly competitor in the trading area has 16,000 square feet of selling space.Site 2 has38,649 potential customers spending an average of $91.25 per year onsportinggoods. In this trading area, two competitors occupy 17,100 square feet ofspace. Theindex of retail saturation for Site 2 is:a. 182.86b. 206.24c. 231.73d. None ofthe above.
Question 74A foreignsales company is a shell company created in an approved U.S. territory or aforeigncountry that allows a business to reduce its U.S. income tax liability by _____on earningsfrom foreign trade.a. 5% to 15%b. 15% to30%c. 30% to50%d. More than30%
Question 75A __________Web site is one that visitors are willing to share with their friends becausethey find it to be useful, informative, or just plain fun.a. stickyb. viralc.collaboratived. robust
Question 76Which of thefollowing is a strategy for building a successful e-business?a. Focus ona niche market.b. Attractcustomers by giving away “freebies” and then sell to them.c. Make sureyour Web site says “credibility” to customers.d. All of theabove
Question 77One distinctadvantage of a loan guaranteed by the Small Business Administration (SBA) is:a. itsbelow-market interest rate.b. itslonger payback period.c. the smallcompany’s ability to defer payments on the loan until its cash position isstrongenough.d. All ofthe above.
Question 78__________is a work arrangement in which employees who spend most of their time away fromthe office use the same office space at different times, which can greatlyreduce theneed for permanent offices that would sit idle much of the time.a.Telecommutingb. Hotelingc. Jobsharingd. Flexplace
Question 79Genuineleaders:a. areself-appointed.b. know thattheir success is determined by their employees’ success.c. treattheir employees severely to earn their respect.d. know thatwhat they say to employees is more important than what they actually do.
Question 80The mostcommonly cited reasons among CEOs for choosing not to make initial public offerings(IPOs) are:a. highcosts and excessive government regulationb. highcosts and loss of control over the company.c. excessivegovernment regulation and loss of control over the company.d. loss ofprivacy and loss of control over the company.