Reference no: EM13971824

Q1. __________ items are best suited for selling on the World Wide Web.

a. high-volume

b. low-margin

c. commodity

d. all of the above.

Q2. 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.

Q3. 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

Q4. 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

Q5. 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.

Q6. Small businesses on the Web are better able to compete if they focus on a niche market.

a. true

b. false

Q7. A(n) __________ is a loan arrangement with a commercial bank in which a small company can borrow up to a predetermined amount at any time during the year quickly and conveniently by writing itself a loan.

a. commercial bank loan

b. line of credit

c. floor plan

d. installment loan

Q8. Which of the following statements about shopping malls is true?

a. The average length of shoppers' mall visits has climbed steadily over the past decade.

b. To keep shoppers coming back, malls are adding a mix of entertainment attractions and a fresh mix of specialty shops to their retail mix.

c. Nearly half of the malls in the United States are less than five years old.

d. All of the above.

Q9. 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.

Q10. 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%

Q11. 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.

Q12. 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

Q13. 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

Q14. Regular special offers that are available only to Web customers will annoy most shoppers.

a. true

b. false

Q15. 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.

Q16. Which of the following countries represents the top market for U.S. small business exporters?

a. Japan

b. Mexico

c. Canada

d. Germany

Q17. 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.

Q18. The advance rate on an asset-based loan secured by a company's inventory typically would be __________ percent.

a. 90-100

b. 75-85

c. 55-85

d. 10-50

Q19. 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

Q20. A(n) __________ is a combination of hardware and software operating between the Internet and a company?s computernetwork 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

Q21. 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.

Q22. The best websites use a variety of fancy typefaces and varying font sizes.

a. true

b. false

Q23. __________ 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

Q24. When a company is doing business in a country that lacks the cash to pay for imported goods or whose currency is basically worthless outside that country's borders, it:

a. should stop doing business there.

b. can use bartering.

c. can use countertrading.

d. can use bartering or countertrading.

Q25. 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.

Q26. 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

Q27. A privacy policy is a critical component of a well-designed Internet business strategy.

a. true

b. false

Q28. 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

Q29. 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

Q30. 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

Q31. 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

Q32. 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.

Q33. 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.

Q34. Online newsletters should be kept to about:

a. 600 words

b. 2000 words

c. 6 pages

d. 20 pages

Q35. 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

Q36. 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

Q37. 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

Q38. 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

Q39. 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

Q40. 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

Q41. 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.

Q42. 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.

Q43. 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

Q44. 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

Q45. 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.

Q46. 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

Q47. 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.

Q48. What drives the choice of the "best" site for a small business?

a. the owner's preferences in finding a good place to live

b. customer traffic

c. cost

d. available rental space

Q49. . According to the textbook, the fastest growing market for U.S. small business exporters is:

a. Brazil

b. Malaysia

c. China

d. Phillipines

Q50. To obtain needed space for a company, ________ is a common choice because it is economical.

a. leasing

b. building

c. renovating

d. designing