1) Entrepreneurs have more control over more aspects of their working lives than employees. Of which aspect of their working lives do employees have more control?
B) Working conditions
C) Financial uncertainty
2) The most successful entrepreneurs say they are motivated by the desire to make
A) money and make their vision come true.
B) their vision come true.
3) A competitive advantage can be based on any of six factors. Which factor below is not one of the six?
4) The cost of producing one additional unit of a product is called cost of
A) services sold.
B) goods sold.
5) Which of the following should be included in a business’s mission statement?
A) Unique selling proposition
6) Dividing a population on the basis of age, gender, income, or education is
B) behavioral data.
C) marketing statistics.
7) New entrepreneurs often feel they should sell their product or service at the lowest price they can afford, yet
A) sometimes consumers think low price indicates low quality.
B) often consumers are willing to pay higher prices than the entrepreneur will charge.
C) purchasers of luxury goods may want to pay a higher price rather than a lower price.
D) all of the above are true.
8) Pricing strategies include
D) all of the above.
9) If you decide to pay yourself a commission from your business, you will be earning a
A) percentage of your business profit.
B) set salary.
C) percentage of each sale.
10) Entrepreneurs ____ constantly, not just to customers but to investors, bankers, and people they want to hire.
A) try to make a good impression
C) do both of the above
11) Carla sells hot coffee, cider, and tea from a sidewalk cart near Wall Street in New York City. Last month she sold $4,500 worth of product to 1,000 customers. She spent $800 on buying her beverages in bulk. Her monthly costs are: Utilities $100, Salary $2,000, Advertising $0, Insurance $0, Interest $0, Rent (cart) $600, Depreciation $0. What are Carla’s fixed costs?
12) Using the information from the question above, what is Carla’s monthly cost of goods sold?
13) Entrepreneurs use a ________________________ to track assets and liabilities.
A) cash flow statement
B) balance sheet
C) income statement
14) The last line of an income statement shows a business’s
A) profit or loss.
B) gross profit or gross loss.
C) net profit or net loss.
15) Venture capitalists can make their money by
A) selling their percentage share of the business to another investor.
B) waiting until the company “goes public” and converting their shares into stock, which can then be traded on the stock market.
C) doing either A or B.
D) doing neither A nor B.
16) Methods of bootstrap financing include
A) using temporary help rather than permanent employees.
B) getting suppliers to extend you credit terms.
C) working from home or borrowing office space.
D) doing all of the above.
17) Which of the three financial statements an entrepreneur prepares is used to guide the day-to-day operations of the business?
A) Income statement
B) Cash flow statement
C) Balance sheet
18) Which statement best describes how the cash flow statement differs from the income statement?
A) The income statement records income, as it comes in, while the cash flow statement records cash from sales.
B) The income statement keeps track of cash when sales are made; the cash flow statement keeps track of cash after sales are made.
C) The income statement records sales and expenses when they happen, not when cash is actually exchanged. The cash flow statement records cash inflows and outflows when they actually occur.
19) If the retail price of an item is $21 and the retail gross profit margin is 33 percent, what is the wholesale cost?
20) A good contract will spell out ___________________, or unforeseeable “acts of God” beyond anyone’s control, for which neither party is responsible.
21) The act of Congress that requires employers to pay men and women the same amount for the same work is called the
A) Equal Opportunity Act.
B) Work Compensation Act.
C) Equal Pay Act.
22) The standards and rules that help someone decide right from wrong are called
C) corporate governance.
23) If a company has a debt-to-equity ratio of 1:1, then for every $1,000 of debt the company has, it has
A) $100 of equity.
B) $10,000 of equity.
C) $1,000 of equity.
24) To quickly grasp a company’s financing strategy, look at its
A) income statement.
B) balance sheet.
C) cash flow statement.
25) A brand is a combination of name, logo, and design that
A) becomes associated in the minds of consumers with the products or services of a company.
B) identifies the owner of a company.
C) expresses the philanthropic intentions of a company to consumers.
26) Licensors must be careful that a licensee
A) doesn’t damage the licensing company’s name.
B) franchises the brand to as many others as possible.
C) controls every aspect of the licensor’s business.
27 Typically, the more risky an investment is, the
A) higher the potential return.
B) lower the potential return.
C) longer it takes to pay off.
28) Liquidity is the
A) amount of risk an investment carries.
B) amount of cash an investment is worth.
C) speed with which an investment can be turned into cash.
29) Entrepreneurs look at five basic roots of opportunity for business ideas. Which is not one of those five?
A) Raising prices in an existing market
B) Finding new ways to use existing technology
C) Producing a product more cheaply
D) Developing a new market for an existing product
E) Exploring new technology
30) The reward for satisfying a customer need is earning a