MGT190-SP. ENTREPRENEURSHIP (MGT190-SP) Take Assessment: MGT 190 Exam 3 Question 1 Companies that ma

MGT190-SP. ENTREPRENEURSHIP (MGT190-SP)
Take Assessment: MGT 190 Exam 3

Question 1
Companies
that make the best candidates for direct public offerings (DPOs):
a. have the
ability to meet the same requirements as companies making stock offerings
using more
traditional methods.
b. have high
name recognition and a loyal customer base.
c. usually
are simple, one-product companies.
d. All of
the above.

Question 2
To finance
her inventory of cars, auto dealer Sarah Ann Lopez would most likely rely on which
type of loan?
a.
commercial bank loan
b. line of
credit
c. floor
plan
d.
installment loan

Question 3
For which of
the following businesses would clustering be an effective location strategy?
a. a car
dealership
b. a flower
shop
c. a
sporting goods store
d. a dry
cleaner

Question 4
__________
are domestic wholesalers who do business in foreign markets, buying goods from
many domestic manufacturers (often competitors) and then marketing them in
foreign countries.
a. Export
trading companies (ETCs)
b. Export
management companies (EMCs)
c. Export
merchants
d. Resident
buying offices

Question 5
A(n)
__________ is a combination of hardware and software operating between the
Internet and
a company?s computer network that allows employees to have access to
the Internet
but keeps unauthorized users from entering the company?s network and
the programs
and the data it contains.
a. virus
detection program
b. firewall
c. intrusion
detection program
d. hacker
block

Question 6
The average
success rate of joint ventures is __________ percent , while its average
life is
__________ years.
a. 81; 20
b. 62; 10.5
c. 43: 3.5
d. 25; 1.5

Question 7
Which of the
following statements concerning financing a small business is true?
a. Choosing
the right sources of capital for a business can be just as important as
choosing the right form of ownership or the right location because of the
long-term impact it has on a company.
b. When it
comes to attracting capital for launching or expanding a business, creativity counts;
entrepreneurs must use as much ingenuity in financing their businesses as they
do
in
generating their product or service ideas.
c. Before
accepting startup money, entrepreneurs must take into account the
“chemistry”
between
themselves, their companies, and their funding sources, making sure that the
match is a
good one.
d. All of
the above.

Question 8
A business
owner seeking money to purchase a building and the equipment needed to launch a
welding shop would need which kind of capital?
a. Fixed
b. working
c. growth
d.
disposable

Question 9
When Blue
Fish Clothing decided to raise money for growth and expansion by selling shares
of company stock straight to investors without relying on an investment banker (or
underwriter), the company was making which kind of stock offering?
a. Rule 147
b. direct
stock offering
c.
Regulation S-B
d.
Best-efforts stock offering

Question 10
The
Americans with Disabilities Act (ADA):
a. applies
to every business, whatever its size.
b. requires
companies to make expensive changes to their work environments and stores
to
accommodate disabled workers and customers.
c. requires
most businesses to make their facilities available to physically challenged
customers
and workers.
d. requires
businesses in all multistory buildings to have elevators.
Question 11
In a
_________ layout, a manufacturer groups workers and equipment according to their
general function.
a. process
b. product
or line
c. fixed
position
d.
functional

Question 12
The typical
venture capital company receives more than 1,200 business plans each year, and
ultimately invests in __________ of them.
a. 3 to 6
b. 15 to 20
c. 30 to 35
d. about 100

Question 13
The first
place entrepreneurs in search of startup funds should look is:
a. their own
pockets.
b. relatives
and friends.
c. venture
capitalist firms.
d. angels.

Question 14
Domain names
can be registered with the U.S. Patent and Trademark Office.
True
False

Question 15
__________
banks are most likely to lend money to small businesses.
a. Small
b. Large
c.
International
d. Foreign

Question 16
The most
important ingredient in the recipe for a successful joint venture is:
a.
negotiating an iron-clad contract that binds both parties.
b. choosing
the right partner.
c. seeing
the joint venture for what it really is: a chance for both parties to make
large
profits by
joining forces.
d. to build
a monopoly in the target country.

Question 17
An
entrepreneur 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 to
locate her business in this area.
a. exception
b. variance
c. redemption
d. exclusion

Question 18
The Arthur
Andersen/MassMutual Survey of American Family Businesses reports that __________
percent of small business owners have written estate plans.
a. 25
b. 40
c. 55
d. 75

Question 19
Which of the
following statements concerning global trade is true?
a. Today,
the global marketplace is as much the territory of small, upstart companies as
it
is that of
giant multinational corporations.
b.
Ninety-six percent of the world’s population and 67 percent of the world’s
purchasing
power lie
outside the borders of the United States.
c. Small
companies that export grow more rapidly than those that operate domestically only.
d. All of
the above.

Question 20
When
financing a business startup with angel financing, entrepreneurs should remember
that:
a. angels
are most likely to finance startups in the $5 to $10 million range.
b. angels
are willing to wait no more than two years to “cash out” their
investments and
expect to
earn at least 60 to 75 percent returns annually.
c. angels
usually invest their money locally, so it is wise to look close to home for
them -usually within a 50-to 100-mile radius.
d. All of
the above.

Question 21
When
searching for a location, a company that develops computer software for the entertainment
industry would be interested in studying which of the following factors
about the
labor supply in a particular area?
a. the
number of workers available
b. the level
of education, training, and experience of the workforce
c. the
prevailing wage rate in the area
d. All of
the above

Question 22
Research by
BizRate.com found that __________ percent of Web shoppers who fill their online
shopping carts become frustrated and leave the site before checking out.
a. 15
b. 25
c. 55
d. 75

Question 23
The ideal domain
name for a company’s Web site should be:
a. short.
b.
indicative of the company’s business or business name.
c. easy to
spell.
d. all of
the above.

Question 24
Which of the
following statements concerning asset-based loans is false?
a. The most
common types of asset-based loans are discounting accounts receivable and
inventory
financing.
b. Because
of its efficiency and low cost, asset-based loans are an ideal source of
long-term
financing.
c. A small
company that qualifies for a $1 million line of credit would be able to borrow
as
much as $3
million using asset-based loans.
d. All of
the above

Question 25
_________
are trade intermediaries that work on a buy-and-sell arrangement, play the role
of an independent international marketing department, and are an important
channel of
foreign distribution for small companies just getting started in international
trade.
a. Export
trading companies (ETCs)
b. Export
management companies (EMCs)
c. Resident
buying offices
d.
Government buying offices

Question 26
The biggest
barrier to exporting facing small companies that have never exported is:
a. not
knowing how or where to start.
b.
government regulations that make it nearly impossible for small companies to
export.
c. the lack
of products and services that would sell successfully in foreign markets.
d. intense
competition in international markets from major multinational corporations.

Question 27
The most
popular loan program sponsored by the Small Business Administration (SBA) is:
a. Low Doc
Program
b. Export
Working Capital Program
c. 7(a) Loan
Guaranty Program
d. All of
the above

Question 28
In a
_________ layout, a manufacturer arranges workers and equipment according to the
sequence of operations.
a. process
b. product
or line
c. fixed position
d.
functional

Question 29
An
entrepreneur trying to find a location for a sporting goods store has decided
to use the index of retail saturation as a guide. She knows that Site 1 has a
trading area with 42,374 potential customers who spend an average of $87.50 on
sporting goods per year. The only competitor in the trading area has 16,000
square feet of selling space. Site 2 has 38,649 potential customers spending an
average of $91.25 per year on sporting goods. In this trading area, two competitors
occupy 17,100 square feet of space. The index of retail saturation for Site 1
is:
a. 182.86
b. 206.24
c. 231.73
d. None of
the above.

Question 30
Small
companies that operate globally are able to:
a. offset
sales declines in the domestic market.
b. extend
their products’ life cycles.
c. raise
their levels of quality and customer-orientation.
d. All of
the above.

Question 31
More than
__________ percent of all companies in the United States are familyowned.
a. 20
b. 40
c. 60
d. 90

Question 32
__________
items are best suited for selling on the World Wide Web.
a.
high-volume
b.
low-margin
c. commodity
d. all of
the above.

Question 33
Under NAFTA,
companies have greater protection of their patents, trademarks, and copyrights
across national borders.
True
False
Question 34
Small
companies 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-fifth
b. 45; one
tenth
c. 58;
two-thirds
d. 97;
one-third

Question 35
A __________
is an exemption from the Security and Exchange Commission’s full-blown
registration process that is designed to make it easier and less expensive for small
companies to make initial public offerings. The ceiling on this type of issue
is $1 million, and the price of the shares must be at least $5.
a.
Regulation S-B
b.
Regulation A
c. Small
Company Offering Registration (SCOR)
d. Direct
Public Offering

Question 36
When a bank
becomes a __________ lender under the Small Business Administration’s loan
program, the bank makes the final decision on a small company’s loan
application (subject only to review by the SBA) but still receives the security
of the SBA’s loan guarantee.
a. certified
b. preferred
c.
authorized
d. conferred

Question 37
Shopping
malls typically average __________ parking spaces per 1,000 square feet of
shopping
space.
a. 2
b. 5
c. 10
d. 16
Question 38
A survey by
GTE Superpages.com found that __________ percent of small businesses do not
have Web sites.
a. 10
b. 30
c. 55
d. 75

Question 39
The simplest
and least expensive way for a small business to begin conducting business
globally is to:
a. establish
a site on the World Wide Web (WWW).
b. launch an
export program.
c. set up a
foreign joint venture with a company in another country.
d. establish
a location in a foreign country.

Question 40
A company
must file a __________ describing both the company and the stock offering with
the Securities and Exchange Commission (SEC) before making an initial public
offering.
a. lockup
agreement
b. letter of
intent
c. statement
of corporate standing
d.
registration statement

Question 41
In 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 an
American entrepreneur need a large dose of patience when conducting business?
a. Spain
b. China
c. Japan
d. All of
the above

Question 42
Small
businesses on the Web are better able to compete if they focus on a niche market.
True
False

Question 43
Alexandra
Hudson, owner of a company that manufactures high quality wood furniture has
forged a long-term partnership with an upscale furniture wholesaler in Denmark
to sell her company’s products in that country. The Danish wholesaler has
agreed to
handle the
distribution details and to provide design ideas to help Hudson’s company
create new
styles that will appeal to Danish customers in exchange for some price
concessions.
The relationship between the two companies began when a
representative
of the Danish furniture wholesaler contacted Hudson through Hudson’s
World Wide
Web site. Hudson and the Danish company have formed a:
a. foreign
joint venture.
b. a
domestic joint venture.
c.
countertrading relationship.
d. foreign
licensing arrangement.

Question 44
Online
newsletters should be kept to about:
a. 600 words
b. 2000
words
c. 6 pages
d. 20 pages

Question 45
In a
performance appraisal, a manger should:
a. keep
comments as general as possible to avoid upsetting workers.
b. use the
time to spring several “surprises” (both good and bad) on employees
about their performances over the past year.
c. critique
employees’ attitudes and abilities rather than their actions.
d. spend
about 20 percent of the time discussing past performance and use the remaining 80
percent of the time to develop goals and plans for the future.

Question 46
Which area
of a retail store would be least valuable?
a. the main
floor in a multistory building
b. the
intersection of two primary aisles
c. the right
rear corner of a store
d. the right
front corner of a store

Question 47
Column A
Column B
people
things
vision
logistics toward the vision
doing the
right things doing things right
comes first
comes second

Column A
deals with __________, and column B deals with __________.
a. staffing;
leadership
b.
leadership; staffing
c.
management; leadership
d.
leadership; management

Question 48
Which of the
following is an effort by the Small Business Administration (SBA) to speed
up
processing times and streamline the process for its loan applications?
a. Preferred
Lender Program
b. Low Doc
Loan Program
c.
SBAExpress Program
d. All of
the above

Question 49
The most
popular estate planning technique among business owners is the:
a. buy/sell
agreement.
b. grantor
retained annuity trust
c. estate
freeze
d. family
limited partnership

Question 50
Studies show
that __________ percent of first-generation family businesses fail to
survive into
the second generation, and of those that do survive, __________ make it
to the third
generation.
a. 20; 81
b. 40; 75
c. 70; 12
d. 90; 24

Question 51
__________
offer many of the same kinds of loans that commercial banks do, but they are
willing to tolerate more risk in their loan portfolios than banks and often use
some type of asset-based lending when making commercial loans.
a. Insurance
companies
b. Stock
brokerage houses
c.
Commercial finance companies
d. Credit
unions

Question 52
Experts draw
an analogy between today’s successful small business leader and:
a. the
conductor of a symphony orchestra.
b. the
leader of a jazz band.
c. a member
of a rock and roll band.
d. a chamber
music concert group.

Question 53
A __________
is relatively small, containing from three to twelve stores and serving a population
of up to 40,000 people who live within a 10-minute drive.
a.
neighborhood shopping center
b. community
shopping center
c. regional
shopping mall
d. power
center

Question 54
The central
business district (CBD) in most cities is characterized by:
a. the
ability to draw customers from the entire trading area of the city.
b. traffic
congestion.
c.
inadequate parking facilities.
d. All of
the above

Question 55
When
creating a Web site, the best approach is:
a. Get the
site online and then tweak it, change it, and update it based on what is
working best.
b. Don’t
launch a Web site until it is absolutely perfect.
c. The
flashier a Web site is the better it is.
d. All of
the above.

Question 56
The average
Web user spends nearly __________ hours online each week.
a. 2
b. 6
c. 16
d. 25

Question 57
Which of the
following statements concerning business location is false?
a. Analyzing
the characteristics of an area’s residents gives entrepreneurs the facts they
need to make
an informed location decision.
b.
Assembling a demographic profile helps entrepreneurs determine how well a
particular
site
measures up to their market profile.
c.
Entrepreneurs should avoid locating their businesses near competitors.
d.
Population density is an important location factor, especially for businesses
that
depend on
high traffic for their success.

Question 58
A(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 of
the business) for the children.
a. family
limited partnership
b. estate
freeze
c. buy/sell
agreement
d. grantor
retained annuity trust

Question 59
This
financing program spans 11 government agencies and is designed to encourage small
companies to expand their research and development efforts in science and engineering
and to develop new commercial products and services from those efforts.
a. Small
Business Innovation Research Program
b. Small
Business Technology Transfer Program
c. Certified
Development Company Program
d. Urban
Development Action Grant Program

Question 60
Experts
estimate that __________ of the products U.S. companies export to other nations
require little modification to sell in foreign markets.
a. one-tenth
b.
one-fourth
c. one-third
d. one-half

Question 61
The first
and foremost obstacle an entrepreneur must overcome to become a truly global
business is:
a. finding
the financing to establish an export program.
b. learning
to think globally.
c. locating
a foreign partner to help navigate the market successfully.
d. adapting
the product or service to suit the tastes, preferences, and customs of foreign markets.

Question 62
Web-based
selling enables small businesses to:
a. increase
their revenues.
b. expand
their reach into global markets.
c. lower the
cost of doing business.
d. all of
the above

Question 63
Retail
customers on the Web demand:
a. good
product selection at competitive prices
b.
well-designed product presentations
c. easy
ordering with fast and reliable shipping and handling
d. All of
the above.

Question 64
Job
__________ involves building motivators into a job by increasing the planning, decision
making, organizing, and controlling functions workers perform.
a.
simplification
b.
enlargement
c.
enrichment
d. rotation

Question 65
Created in
1947, this became the first global tariff agreement, and, today, it includes
124
countries that account for nearly 90 percent of world trade.
a. NAFTA
b. WTO
c. GATT
d. NATO

Question 66
A __________
trust is a special type of irrevocable trust that has become one of the
most popular
tools for entrepreneurs seeking to transfer ownership of their companies
while
maintaining control over it and minimizing their estate taxes.
a. bypass
b.
irrevocable life insurance
c.
irrevocable asset
d. grantor
retained annuity trust

Question 67
Which of the
following statements concerning the interview process is false?
a. To avoid
the threat of lawsuits, business owners should ask only questions calling for
“yes/no”
answers.
b. Creating
hypothetical situations candidates would be likely to encounter on the job and
asking how
they would handle them gives insight into their work habits and attitudes.
c. Develop a
series of core questions and ask them of every candidate.
d. Business
owners should ask candidates about a recent success and a recent failure
and then
look for those who describe them both with equal enthusiasm.

Question 68
Business
incubators:
a. combine
low-cost, flexible rental space with a multitude of support services for their
small
business residents.
b. give
small companies a greater chance for success by offering them valuable business
services as
well as connections to funding sources and management consulting.
c. improve
their residents’ survival rates;
d. All of
the above.

Question 69
A privacy
policy is a critical component of a well-designed Internet business strategy.
True
False

Question 70
A small
company using factoring would prefer which type of factoring arrangement?
a. with
recourse
b. without
recourse
c. exempted
d. None of
the above. A small company should never use factoring as a source of
financing
because of its excessively high risks and costs.

Question 71
When a
speaker sends conflicting verbal and nonverbal messages, listeners are most likely
to believe
a. the
verbal message
b. the
nonverbal message
c. neither
one
d. none of
the above.

Question 72
Regular
special offers that are available only to Web customers will annoy most shoppers.
True
False

Question 73
An
entrepreneur trying to find a location for a sporting goods store has decided to
use the index of retail saturation as a guide. She knows that Site 1 has a
trading area with
42,374
potential customers who spend an average of $87.50 on sporting goods per
year. The
only competitor in the trading area has 16,000 square feet of selling space.
Site 2 has
38,649 potential customers spending an average of $91.25 per year on
sporting
goods. In this trading area, two competitors occupy 17,100 square feet of
space. The
index of retail saturation for Site 2 is:
a. 182.86
b. 206.24
c. 231.73
d. None of
the above.

Question 74
A foreign
sales company is a shell company created in an approved U.S. territory or a
foreign
country that allows a business to reduce its U.S. income tax liability by _____
on earnings
from foreign trade.
a. 5% to 15%
b. 15% to
30%
c. 30% to
50%
d. More than
30%

Question 75
A __________
Web site is one that visitors are willing to share with their friends because
they find it to be useful, informative, or just plain fun.
a. sticky
b. viral
c.
collaborative
d. robust

Question 76
Which of the
following is a strategy for building a successful e-business?
a. Focus on
a niche market.
b. Attract
customers by giving away “freebies” and then sell to them.
c. Make sure
your Web site says “credibility” to customers.
d. All of the
above

Question 77
One distinct
advantage of a loan guaranteed by the Small Business Administration (SBA) is:
a. its
below-market interest rate.
b. its
longer payback period.
c. the small
company’s ability to defer payments on the loan until its cash position is
strong
enough.
d. All of
the above.

Question 78
__________
is a work arrangement in which employees who spend most of their time away from
the office use the same office space at different times, which can greatly
reduce the
need for permanent offices that would sit idle much of the time.
a.
Telecommuting
b. Hoteling
c. Job
sharing
d. Flexplace

Question 79
Genuine
leaders:
a. are
self-appointed.
b. know that
their success is determined by their employees’ success.
c. treat
their employees severely to earn their respect.
d. know that
what they say to employees is more important than what they actually do.

Question 80
The most
commonly cited reasons among CEOs for choosing not to make initial public offerings
(IPOs) are:
a. high
costs and excessive government regulation
b. high
costs and loss of control over the company.
c. excessive
government regulation and loss of control over the company.
d. loss of
privacy and loss of control over the company.