1, The fastest growing business sector is

Large firms b. medium sized firms c. small business d. none of these

2, If the target market for your business is those with incomes of over $200,00 per year, you should pursue a _____________ market strategy.

Low cost b. broad c. focus d. positioning

3, A marketing plan should

Determine customer needs and wants through market research

Pinpoint specific target markets

Analyze competitive advantages and use them to develop marketing strategy

All of the above

4, The opportunistic entrepreneur

Waits for someone to offer a business opportunity

Works in a large corporation

Actively seeks business opportunities

Two of the above.

5, The focus strategy depends on creating value for the customer either by being the low cost producer or differentiating the product or service in a unique fashion, but doing it in a narrow target segment.

True b. False

6, The major distinction between cash-basis and accrual-basis accounting it that the

Cash method is easier to use

cash method matches revenue and expenses better

point of recognition of revenue and expenses is different

cash method involves less record keeping

7,If a retailers estimated sales are $1.5 million and the sales-to-inventory ratio is 9, the retailer should maintain an inventory of a. $127,538.00 b. $166,667.00 c. $176,492.00 d. $180,000.00

8, You manufacture two models of bongs. Your deluxe model sells for a price of $15.00 and has a variable cost of $7.00 each. The standard model sells for $10.00 each with a variable cost of $5.00 each.

You broke even with sales of the deluxe model of 3,000 units. How many deluxe units must you sell to make a profit of $12,000.00? a. 3,750 b. 4,000 c. 4,500 d. 5,000

9, Refer to #8. How many standard models must you sell to make $12,000.00 profit if BEP is 2,500 units?

5,400 b. 4,900 c. 4,800 d. 4,500

10, A firms profits depend upon

Amount of sales b. taxes c. operating expenses d. all of the above e. none of these

11, You must pay your firms debts within 100 days. Which of the following ratios will show whether this can be done? A. Current b. times interest earned c. quick ratio d. debt to equity e. asset turnover

12. A primary source of funding for most smaller companies is

Long term bank loans b. short term credit c. personal funds d. mortgages e. long-term notes

13. Single proprietor firms, LLCs, and subchapter S income is taxed on the same basis.

a. True b. False

14. Authority to incorporate a business comes from; a. vote by majority of the stockholders

b. corporate officers c. board of directors d. government e. none of these

15. Assume a fixed costs of $120,000.00, Each production unit costs $22.00 in labor and $16.00 in parts with a sales price of $$60.00 each. How many units must be produced to break even?

a. 3,750 b. 4,276 c. 5,000 d. 5,455 e. none of these

16. Which of the following is not a trait of a successful entrepreneur?

a. Achievement oriented b. profit seeking c. risk avoidance d. inquisitive

17. In which phase of the product life cycle do profits begin to fall because competitors enter the market?

a. introduction b. growth and acceptance c. maturity and competition d. market saturation

18. The product life cycle concept means that small businesses must

a. trace demographic and psychographic trends carefully b. create both place and time utility if they are to survive. c. constantly be involved in product innovation d. use a market penetration strategy if they are to be successful.

19. It is easier to get new customers than to retain the current customers. a. True b. False

20. The marketing-management style most desirable for small firms is a. sales oriented b. customer oriented c. production oriented d. competition oriented

21. Market segmentation always groups people according to their a. age b. incomes c. similarities d. differences

22. ________________ activities must precede _______________

a. marketing tactics, marketing analysis b. marketing analysis, marketing tactics c. marketing, tactics, price setting d. marketing analysis, product identification

23. The most favorable forecasting position occurs when which of the following exists?

a. a new business with new ideas b. an ongoing business with existing products c. an ongoing business with a new ides d. all of the above are equally favorable

24. Customer accessibility is the most critical factor when deciding location for a

a. furniture store b. plumbers shop c. drugstore d. store that sells pianos

25. In terms of willingness to take risks, entrepreneurs show a. low risk-taking propensity b. moderate risk-taking propensity c. high risk-taking propensity d. extremely high risk-taking propensity

26. A benefit of starting a new venture rather than buying an existing business is that the entrepreneur obtains a. a better estimate of sales volume b. freedom to select ideal location and equipment c. lower interest rates d. the right to apply for SBA loans

27. The circumstance which spawns new venture ideas is a. work experience b. hobbies c. accidental discovery d. all of the above e. none of the above

28. The following are costs of inventory a. storage b. insurance c. obsolescence d. all of these e. none of these

29. In calculating the Economic Order Quantity, the number 2 appears in the equation. This is because a. We are dealing with total costs for the year b. we are dealing with average annual inventory costs

c. both; of the above d. neither of the above

30. You begin your business inventory with an inventory valued at $12,425.00. At the end of the business year, the inventory is valued at $7,350.00. The average inventory value is _______________. a. $19,725.00 b. $7,350.00 c. $6,212.50 d. none of these