7,-_ involve(s) planning, organizing, staffing, directing, and controlling (developing) a company's resources so that it can achieve its goals. a. b. Management Production d. Consumerism aeconomy is one in which the government does not directly interfere in production matters. b. Communist C Socialist 8. In theory,a_ Free market d. Financial 9. The "Mission Statement" section of the business plan contains financial data and projections regarding Pro forma Income Statement and Balance Sheet. the firm's a. True b. False 10. Common equity includes all of the following accounts except a. retained earnings b. common stock at par value c. preferred stock d. additional paid in capital 11. When entrepreneurs fail, they tend to: a. view the failure as an outcome that was caused by forces beyond their control b. quickly dismiss the failure and soon convince themselves that it didn't really occur e. view it as an opportunity to learn from their mistakes and strive to not repeat them. d. take it very personally, so it has a devastating effect on their selif confidence and selif esteem. 12. All of the following are advantages to buying a franchise EXCEPT which one? a. You get a known brand (and a ready-to-go business). b. You get lots of help in starting and running your business. CYou must pay a franchise fee and royalty fees to the franchisor d. You get advertising support. 13. The difference between stock and debt from the company's perspective is that: debt is an asset while stock is a liability debt is a legal, binding contractual obligation that must be you cannot sell stock if you have debt in the company b. C. d. debt never has to be repaid but a stockholder's investment must be repaid 14. Agency theory involves a. Separation of ownership and control issues. b. Methods for firms to provide for the sick, the young, the elderly, and the environment. c. Issues related to high tax rates that undermine incentives d. Ways/methods to encourage entrepreneurship