MGT 418 Evaluating New Business Opportunities Final Exam University of Phoenix

MGT 418 Evaluating New Business Opportunities Final Exam University of Phoenix

Multiple Choice Questions Week 1 to Week 5

Week 1

  1. Which of the following is the correct sequence for the four steps in the entrepreneurial process?

A) deciding to become an entrepreneur, developing successful business ideas, moving from an idea to an entrepreneurial firm, managing the growing entrepreneurial firm
B) developing successful business ideas, deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm, managing and growing the entrepreneurial firm
C) developing successful business ideas, moving from an idea to an entrepreneurial firm, deciding to become an entrepreneur, managing and growing the entrepreneurial firm
D) deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm, developing successful business ideas, managing and growing the entrepreneurial firm
E) managing and growing the entrepreneurial firm, developing successful business ideas, deciding to become an entrepreneur, moving from an idea to an entrepreneurial firm

  1. Which of the following is not a personality trait or characteristic common among entrepreneurs?

A) promoter
B) visionary
C) short attention span
D) alert to opportunities
E) self-starter

  1. The three ways to identify an opportunity include:

A) observing trends, solving a problem, and finding gaps in the marketplace
B) studying industry trade journals, talking to consumers, and solving a problem
C) observing trends, conducting brainstorming sessions, and studying industry trade journals
D) observing trends, talking to consumers, and finding gaps in the marketplace
E) reading books, solving a problem, and findings gaps in the marketplace

  1. Economic factors, social factors, technological advances, and political action and regulatory changes are the most important trends to follow in trying to identify opportunities.

A) True
B) False

  1. Managers who have lost their jobs due to corporate downsizing are likely to become entrepreneurs because

A) they frequently have considerable experience.
B) their chances of getting a job as good as the one they lost are slim.
C) they desire independence.
D) all of the above.
E) none of the above.

  1. Jobs were a societal invention to provide the needed human resource element to allow the industrial revolution to proceed.

A) True
B) False

  1. Entrepreneurship has been defined as a process activity that includes

A) an opportunity.
B) an organizational context.
C) innovation
D) all of the above.

  1. Which of the following is not true concerning entrepreneurs and risk?

A) They usually take high risks.
B) They define risks early in the start-up process.
C) They minimize risks to every extent possible.
D) They see risk differently than the general public.

Week 2

  1. Does it make sense? Is it reasonable? Is it something consumers will get excited about? Does it take advantage of an environmental trend, solve a problem, or fill a gap in the marketplace? These are the types of questions asked during the ________ component of a complete feasibility analysis.

A) financial feasibility
B) industry/target market feasibility
C) organizational feasibility
D) concept feasibility
E) product/service feasibility

  1. According to the textbook, the first step in a competitor analysis is to:

A) develop a marketing plan
B) develop the strategic plan
C) study the strength of the industry
D) study the external environment
E) determine who the competition is

  1. Which of the following is not one of the purposes of a business model?

A) serves as an ongoing extension of feasibility analysis
B) serves as a template for conducting industry analysis
C) focuses attention on how all the elements of a business fit together
D) describes why the network of participants needed to make a business idea viable is willing to work together
E) articulates a company’s core logic to all stakeholders

  1. A clearly articulated business model articulates a company’s core logic to all stakeholders, including the firm’s employees.

A) True
B) False

  1. The two basic considerations that should be included in determining the price of a business include

A) the value of the business’ assets and its future earnings.
B) book value and liquidation value.
C) taxing levels and start-up costs.
D) entry costs and departure proceeds.
E) none of the above.

  1. Part of the prospective buyer’s task in preparing for negotiations to buy a business includes talking with

A). competitors.
B). customers.
C). suppliers.
D). employees of the business.
E). all of the above.

  1. Owners of small businesses use various approaches to determine how much to ask for the business; among these approaches are the following:

A) the I know what it cost me
B). the I know what I have to take out of here approach.
C). the approach that is based on the price commanded by similar firms.
D). all of the above.

  1. One of the advantages of buying a business, as opposed to that of starting one, is there is more room for creativity.

A) True
B) False

Week 3

  1. Franchising is a form of business ownership in which a firm that already has a successful product or service licenses its trademark and method of doing business to another business in exchange for:

A) an initial franchise fee and an ongoing royalty
B) a one-time franchise fee
C) an equity position in the new business
D) an ongoing royalty
E) an initial franchise fee and an equity position in the new business

  1. A ________ franchise is an arrangement under which the franchisor grants to the franchisee the right to buy its products and use its trade name.

A) product and trademark
B) product extension
C) business format
D) production plus
E) business design

  1. There are two primary advantages to buying a franchise over other forms of business ownership. First, franchising provides an entrepreneur the ability to own a business using tested and refined business methods, and second:

A) franchising is almost a sure way of making a profit
B) a franchise agreement is typically easy to exit if expectations aren’t met
C) franchisors typically encourage creativity on the part of franchisees
D) the franchisor typically provides training, technical expertise, and other forms of support
E) franchise organizations are consistently more profitable than non- franchise organizations in the same industry

  1. The Franchise Disclosure Document contains a total of 23 categories of information that give a prospective franchisee a broad base of information about the background and financial health of the franchisor.

A) True
B) False

  1. Product franchising is an arrangement in which

A). dealers are given the right to distribute goods for a manufacturer.
B). the dealer is the franchising agent.
C). the manufacturer is the franchisee.
D). all of the above.
E). none of the above.

  1. Among the disadvantages faced by a franchisee are

A). the costs associated with owning a franchise.
B). dealing with a skeptical public.
C). recruiting and developing employees.
D). all of the above.

  1. The franchise agreement includes arrangements for things such as

A). how is the business is to be run.
B). purchases of supplies.
C). royalty levels.
D). charges for management, advertising, and other corporate services.
E). all of the above.

  1. Because of the government’s interest in protecting parties involved in franchising, the prospective franchisee must notify the franchiser within two weeks after receiving the franchise agreement or lose out on the deal.

A) True
B) False

Week 4

  1. Which of the following is not one of the four factors identified in the textbook as critical in selecting a form of business ownership?

A) the cost of setting up and maintaining the legal form
B) the number and types of investors involved
C) accounting considerations
D) tax considerations
E) the extent to which personal assets can be shielded from the liabilities of the business

  1. Choosing a legal entity for a firm is a one-time event. Once a form of legal entity has been chosen, it cannot be changed.

A) True
B) False

  1. A financial statement is a(n):

A) set of ratios which depict relationships between a firm’s financial items
B) estimate of a firm’s future income and expenses
C) hybrid statement of cash flows
D) itemized forecast of a company’s income, expenses, and capital needs
E) written report that quantitatively describes a firm’s financial health

  1. A firm’s working capital is its:

A) inventory and accounts receivable minus its current liabilities
B) current assets minus its current liabilities
C) total assets minus its total liabilities
D) cash and cash equivalents minus its current liabilities
E) accounts receivable minus its total accounts payable

  1. Which of the following are questions that should be explored as a business start is planned?

A) What product or service will be provided?
B) Why will our prospective customers buy from our business?
C) How will we go about our task?
D) all of the above

  1. The source of business ideas has many forms including

A) self-appraisal in the hope of finding something upon which to base a business.
B) a systematic search of the environment for opportunities.
C) being in the right place at the right time.
D) all of the above.
E) none of the above.

  1. A successful new product or service must

A) satisfy a customer need.
B) use distribution channels similar to the competition.
C) combine industries.
D) all of the above.

  1. New product development is a high-risk endeavor, since many new products and services fail.

A) True
B) False

Week 5

  1. The four main financial objectives of a firm are:

A) efficiency, effectiveness, strength, and flexibility
B) power, success, efficiency, and effectiveness
C) control, effectiveness, liquidity, and power
D) success, strength, liquidity, and profitability
E) profitability, liquidity, efficiency, and stability

  1. The pro forma balance sheet provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its finances will evolve over time.

A) True
B) False

  1. Which of the following is not one of the six stages of business development?

A) Conception
B) Survival
C). Stabilization
D). Administration

  1. An entrepreneur’s style of management should be matched with the

A) style used by competitors.
B) work to be performed each week.
C) hours of the company’s operation.
D).  entrepreneur’s personality.

37. During the past few decades the number of businesses owned by women

A) Increased
B) Decreased
C).  remained the same.
D).  was not recorded.

38. The term “minority entrepreneurs” includes ethnic entrepreneurs, immigrant entrepreneurs, and entrepreneurs from minority populations.

A) True
B) False

  1. An industry in which the labor force works from home is known as a(an)

A).  cottage industry.
B). economic industry.
C).  self-employed industry.
D).  industrial revolution industry.

40.  Ownership of a family business can legally be transferred

A). while the owner is still living.
B). as a gift to the children.
C). by selling the business to the children.
D). all of the above.

Course MGT 418 Evaluating New Business Opportunities
School: University of Phoenix

  • : 30/05/2017
  • : 15