1. Which of the following statements is incorrect?

Select one:

a. Angel investor is a wealthy individual who invests in companies in relatively early stages of development.

b. Pull-through system is a statistical technique that determines the quantity of inventory that a business must hold that minimizes total inventory cost.

c. Bootstrapping is using funds generated by business operations to capitalize growth.

d. Tax abatement is a legal reduction in taxes by a government.

2. Which of the following is a reason why most new businesses start on a part-time basis?

Select one:

a. There is lack of volatility.

b. The cost of entry and exit is low.

c. The part-time workforce is dependable.

d. The window of opportunity is always open.

3. Taras yarn shop held a sidewalk carnival with games and prizes in front of her store with proceeds benefitting a local family who had lost everything in a fire. The local paper stopped by to take pictures and interview participants. The resulting story in the paper was a form of

Select one:

a. paid media.

b. owned media.

c. earned media.

d. shared media.

4. Karlas Koffee shop has $70,000 in assets and $30,000 in liabilities. What is the owners equity?

Select one:

a. $40,000

b. It is impossible to know the owners equity as there is not enough information given.

c. $100,000

d. $50,000

5. The minimum possible expenditure of capital and other resources in order to bring an entrepreneurial idea to market is known as

Select one:

a. leverage contingencies.

b. bootstrapping.

c. lean business practices.

d. affordable loss.

6. Which of the following is one of the ways to get into small business ownership?

Select one:

a. bricolage

b. bootstrapping

c. strategic partnerships

d. franchising

7. Tina runs her consultancy business from her home. Working from home allows her to set her own schedule and take time off at her convenience so that she can be with her family. The fact that Tina gets more time with her family can be categorized as ________ reward.

Select one:

a. growth

b. income

c. credit

d. flexibility

8.The total cost of obtaining an asset, including such costs as purchase price, transportation, installation, testing, and calibrating in order to ready it for its first productive use is termed as

Select one:

a. replacement cost.

b. cost of operating.

c. acquisition cost.

d. cost of disposition.

9. ________ analysis is based on the concept that the longer you have to wait to receive money, the less valuable it is right now.

Select one:

a. Due diligence

b. Net realizable value

c. Book value

d. Discounted cash flow

10. Christopher is a hard-working entrepreneur who looked into all the details of his small gaming software business. He focused on all aspects of the business from the initial launch, promotion, and marketing aspects to the final set up. He finds planning convenient and works according to a plan. Christopher is a(n)

Select one:

a. reactive planner.

b. habit-driven planner.

c. opportunistic planner.

d. comprehensive planner.

11. The proxy contest is an attempt to gain control of a firm by soliciting a sufficient number of shareholder votes to replace existing management.

Select one:

True

False

12. Taras friend Robbie worked at the local coffee shop. Tara always stopped to get her morning coffee from the shop because Robbie would fix her a deluxe coffee but only charge her for a standard cup of coffee. This is an example of

Select one:

a. phony disbursements.

b. an ethical transaction between friends.

c. embezzling.

d. skimming.

13. The owner of Elixir Force Inc. received the most prestigious corporate award and was also titled as "the most outstanding new entrepreneur of the year." In the context of people-based legitimacy, this is typically an indicator of

Select one:

a. brand equity

b. experiential supports.

c. public recognition.

d. business network membership.

14. Which of the following statements is correct?

Select one:

a. Micro-inventory: the process of physically counting business assets on a set schedule.

b. Physical inventory: a system of recording the receipt and sale of each item as it occurs.

c. Just-in-time inventory: the practice of purchasing and accepting delivery of inventory only after it has been sold to the final customer.

d. Perpetual inventory: a count of all the inventory being held for sale at a specific point in time.

15. When Naja opened her craft store, her yarn supplier allowed her to charge up to $1000 in merchandise with no set payment amounts due. Naja paid off the balance as she sold the yarn and was then able to order more yarn on credit, up to her $1000 limit. This arrangement is considered a form of

Select one:

a. affordable loss

b. bricolage

c. due diligence

d. revolving credit

16. Selling your product or service in a limited area, for a limited time is known as parallel marketing.

Select one:

a. FALSE

b. TRUE

17. An arm's length transaction is a business deal where the parties have a prior relation or affiliation, but where the business is conducted as if they were unrelated.

Select one:

a. TRUE

b. FALSE

18. ZestOne Technologies has launched a series of tablet computers that are similar to a competitor's product that already exists in the market. Such products are typically termed as

Select one:

a. augmented products.

b. a pivot.

c. prototypes.

d. me-too products.

19. Kevin wanted to start his own business of ferrying pets to the vet or groomers for their owners but he was advised to perform a feasibility analysis before moving forward. Kevin is on the third step of the entrepreneurial process: plan.

Select one:

a. FALSE

b. TRUE

20. Alex has two sources of capital for his business equity at a cost of 15% and debt at a cost of 10%. Figure his weighted average cost of capital at 75/25 equity/debt.

Select one:

a. 14.2%

b. 13.75%

c. 11.8%

d. 12.5%

21. Your ________ is your unique selling points that customers can expect from your goods or services, including those that differentiate your offerings from those of the competition.

Select one:

a. degree of similarity

b. marketing

c. value proposition

d. entry wedge

22. Juans Auto Repair is preparing its income statement. The report shows sales revenue of $80,000, cost of goods sold at $30,000, and sales, general, and administrative expenses of $25,000. Since Juan uses the single-step format for his income statement, what is Juans net income?

Select one:

a. $80,000

b. $25,000

c. There is not enough information here to determine Juans net income.

d. $55,000

23. Christine thinks shell need $80,000 to start her business and expects it to make $50,000 the first year. If Stephanie could fund half the amount herself and borrowed the rest, what would her return on equity be?

Select one:

a. 125%

b. 95%

c. 111%

d. 62.5%

24. A ________ is a legal agreement that grants the rights to use a particular piece of intellectual property.

Select one:

a. license

b. royalty

c. freemium

d. licensee

25. Suppose a company wants to raise $100 million. The subscription price is $400 and the current stock price is $450. The firm currently has 80,000,000 shares outstanding. How many shares have to be issued?

Select one:

a. 222,222

b. 250,000

c. 350,000

d. 500,000

26. Martin, an employee at a boutique store, is required to handle store displays and also ensure that all the sales records tally at the end of each business day. However, he committed fraud by recording fake sales and then keeping the products for himself. Which of the following managerial concepts would have helped the store avoid this deception?

Select one:

a. separation of duties

b. accession

c. code of ethics

d. adverse possession

27. Adam owns a software development company. He and his team developed and licensed new software that could help many organizations strengthen their web security. Any organization that wishes to use Adam's licensed software would most likely have to pay him in the form of a

Select one:

a. royalty.

b. pay-off.

c. payout.

d. freemium.

28. Setting the price for an item relatively low and then charging much higher prices for the expendables it uses is called

Select one:

a. captive pricing.

b. price lining.

c. price skimming.

d. premium pricing.

29. Josh, an electronics retailer, noticed that the e-commerce business was booming. He started an online shopping website to take advantage of this surge in business. As a result, his business attracted more customers from all across the country. This reflects Josh's

Select one:

a. entrepreneurial alertness.

b. imitative skill.

c. retail arbitrage.

d. creativity.

30. Which of the following is an example of debt financing?

Select one:

a. crowdfunding

b. angels

c. incubators

d. venture capitalists

31. Which of the following is an example of a second career entrepreneur?

Select one:

a. Cynthia, a 24-year-old, starting a consultancy business after graduating from college.

b. Mark, a 30-year-old, starting a new business venture in stock trading after the failure of his previous business in real estate.

c. Timothy, a 48-year-old, joining a real estate agency as a sales representative, after being downsized from his previous job.

32. In breakeven analysis, the price of one unit minus the variable cost of one unit is called the

Select one:

a. contribution margin.

b. total cost.

c. fixed cost.

d. sensitivity analysis.

33. Anna helps brides-to-be choose wedding gowns that best suit their requirements and budget, and also helps them with where they can find the right dress. She has made her home her virtual office; she does not require external financing. Anna is using ________ to run her small business.

Select one:

a. bootstrapping

b. crowdsourcing

c. franchising

d. Crowdfunding

34. Sven opening his own business servicing private swimming pools. Sven worked hard to build up his customer base, often performing services on last-minute notice, or even on holidays and weekends. Now, Sven has a comfortable number of routine services he provides for his customers and his business is profitable enough to support himself and his family. Which type of business does Sven likely own?

Select one:

a. a unicorn

b. a lifestyle business

c. a high-performing small business

d. a traditional small business

35. Which business risk category does this event refer to? Brian couldnt believe that the parents would allow their child to run wild through his antique store; he wasnt surprised when the child pulled an end table over on himself.

Select one:

a. Injury due to employment

b. Property

c. Customers and others

d. Personnel

36. Marry thought her online dating service was nearly foolproof, but that was until her competitor came out with a new option that allowed online, real time video chatting. Can you identify the risk she has had?

Select one:

a. Injury to customer

b. Financial risk

c. Product/service obsolescence

d. Injury due to employment

37. Lily, a restaurant owner, is planning to invest in a multipurpose ZS-13 baking oven. The oven costs $20,000 and will have a useful life of 10 years. The payback each year is $8,000. Assuming that the money is received evenly across the year, what will be the payback period if she decides to purchase the oven?

Select one:

a. 3 years and 3 months

b. 2 years and 6 months

c. 2 years and 1 month

d. 1 year and 5 months

38. The "going concern" concept states that

Select one:

a. accounting information must be useful to the owners and managers of businesses.

b. the premise of revenue and expense are a part of business.

c. a business has an existence that is separate from its owner.

d. a successful business will stay in business.

39. Billboards are a tradition form of ________, and the online equivalent would be the placement in search engine results and portal ads.

Select one:

a. OOH ad placements

b. referral promotions

c. product placement

d. sales promotion

40. The IDEO screen consists of asking yourself three questions to help you screen entrepreneurial ideas. Which of the following is not one of those three questions?

Select one:

a. Can we make the solution and make money doing it?

b. Can the solution really solve the problem, and can we make it?

c. Is the solution feasible enough to receive funding?

d. Do customers really want the solution being offered?

Amy plans to open a laundromat with a gym. She got the idea from the laundromat with a bar and game rooms, which she visits regularly. She wants to test her idea by starting out in a small space with the focus on the laundromat and a small space allocated for gym equipment. Amy's idea is an example of

Select one:

a. retrenchment.

b. a blue ocean strategy.

c. parallel competition.

d. an incremental innovation.

41. Sylvia had helped Jonathan, one of her previous subordinates, in establishing his business by referring him to an important venture capitalist. As an appreciation of her help, Jonathan has now agreed to hire and personally mentor her son as a trainee in his company. Both Sylvia and Jonathan are typically exhibiting:

Select one:

a. universalism.

b. mutuality.

c. bootstrapping.

d. caveat emptor.

d. Ursula, a 60-year-old, starting a business in shrimp trading after being retired for 5 years.