Reference no: EM131850325

Q1. The most common type of commercial bank loan granted to small businesses is ________.

a. the short-term loan

b. the line of credit agreement

c. floor planning

d. the unsecured term loan

Q2. Entrepreneurs basically "borrow from themselves" by pledging their ________ as collateral for the loans they receive in a ________.

a. business; commercial loan

b. business assets; home equity loan

c. home; home equity loan

d. big ticket items; floor loan

Q3. The SBA's Section 504 Certified Development Company Program (CDC), which provides long-term, fixed-asset financing, is designed to encourage small businesses to expand their facilities and to create jobs.

a. True

b. False

Q4. The primary advantage of equity capital is ________.

a. its lower interest rate

b. that it is readily available to a large number of entrepreneurs from a variety of lenders

c. that it does not have to be repaid like a loan does

d. that it does not appear on a company's balance sheet

Q5. Venture capitalists look for ________ as the most important ingredient in the success of any business.

a. innovation

b. a growth industry

c. a competitive edge

d. competent management

Q6. In most SBA loans, the SBA does not actually lend any money, it merely guarantees a bank repayment of a portion of the loan the bank makes in case the borrower defaults.

a. True

b. False

Q7. The primary disadvantage of equity capital is that the entrepreneur ________.

a. must repay it at some point with interest

b. must give up some (perhaps most) of the ownership in the business to outsiders

c. experiences the disadvantage of the risk/return tradeoff in the form of higher interest rates

d. B and C above

Q8. The single most important ingredient in making a successful public offering is ________.

a. choosing a capable underwriter

b. negotiating a favorable letter of intent

c. preparing a suitable registration statement

d. filing Regulation D with the SEC

Q9. A(n) ________ is when a company raises capital by selling shares of its stock to the general public for the first time.

a. venture capital offering

b. partnership

c. debt equity arrangement

d. initial public offering

Q10. Private investors, or Angels, are an excellent source of ________ money.

a. immediate

b. patient

c. long-term

d. passive

Q11. The region from which a business can expect to draw its customers over a reasonable time span is called its ________.

a. enterprise zone

b. zoning area

c. trading area

d. retail draw

Q12. The location has far-reaching ramifications (such as high-tech companies) that need ________.

a. a highly-skilled work force

b. a high traffic site

c. easy access to shipping routes

d. a nearby retail district

Q13. U.S. Census department's "TIGER" file ________.

a. is a software package combining the ability to draw detailed maps with the power to search through databases

b. breaks down the population, retail sales, etc., by census region

c. contains the names of every street in the country and detailed block statistics for urban areas

d. All of the above

Q14. A glass manufacturer that requires an extremely pure, very fine sand in its production process would be most concerned about the ________.

a. business climate

b. proximity to raw materials

c. demographic profile of the local market

d. local wage rates

Q15. When examining a state's available labor force, the potential business owner needs to know ________.

a. the state's labor relations history

b. the demographics of the target customers

c. both the number and education of the available workforce

d. the proximity to its customers

Q16. Which of the following characteristics for selecting a city would be of greatest interest to a retail store selling fine china and collectibles?

a. Public services

b. Transportation

c. Zoning

d. Population characteristics

Q17. Locating close to ________ is critical for manufacturers, service providers and other companies that will be competitive.

a. markets they plan to serve

b. suppliers

c. transportation routes

d. airports and rail transportation

Q18. The primary variable(s) that influence(s) the scope of a trading area is/are the ________.

a. character of the transportation network

b. nature of competing businesses

c. TYPE AND SIZE of the business operation

d. racial and political barriers in the local community

Q19. The index of retail saturation ________.

a. is retail expenditures times retail facilities divided by the number of customers

b. is the ratio of a trading area's sales potential to its sales capacity

c. evaluates both the number of customers and the intensity of competition in a trading area

d. B and C above

Q20. When conducting a regional evaluation, one of the first places an entrepreneur should turn for information is the U.S. Census Bureau.

a. True

b. False

Q21. ________ is a transaction in which a company selling goods and services in a foreign market agrees to help promote investment and trade in that country.

a. Countertrading

b. Bartering

c. Foreign licensing

d. Exporting

Q22. A tariff is ________.

a. a law that a government uses to regulate products that are imported into the country

b. the maximum amount of a product that can be imported or exported

c. a prohibition or suspension of foreign trade of specific imports or exports

d. a duty, or tax, that a government puts on products that are imported into the country

Q23. The ________ of a nation includes the belief, values, views, and mores that its inhabitants share.

a. political atmosphere

b. culture

c. tariffs

d. free trade area

Q24. In a(n) ________, a domestic small business forms an alliance with a company in the target nation for the purpose of exporting to that market.

a. foreign joint venture

b. trade intermediary

c. domestic joint venture

d. export management company

Q25. Foreign licensing has its greatest potential in the licensing of ________.

a. products

b. intangibles (e.g., technology, copyrights, and trademarks.)

c. goods

d. franchises

Q26. Nance Technologies, Inc., has agreed to sell some of its computers to a company in Bascovina, a country whose currency is worthless outside its own borders. As part of the agreement, Nance will sell the foreign customer its computers in exchange for a specified number of tons of coffee, a major export of Bascovina. Nance has already arranged to sell the coffee to a major processor for a set price in U.S. dollars. Nance has engaged in ________.

a. bartering

b. foreign licensing

c. exporting

d. countertrading

Q27. Foreign distributors offer exporting small businesses the benefit of knowledge of the local markets in which they sell, the ability to cover a foreign sales territory thoroughly, and the ability to handle all of the marketing, distribution, and service functions in foreign markets.

a. True

b. False

Q28. The most important ingredient for a successful joint venture is ________.

a. targeting the right country in which to sell

b. getting government approval and avoiding antitrust charges

c. choosing the right partner

d. splitting costs and profits equally

Q29. The North American Free Trade Agreement has which of the following provisions?

a. The immediate elimination of all tariff and quota barriers on all goods.

b. The elimination of tariffs on most goods.

c. A lowering of safety and air quality standards.

d. The formation of a North American Trade Organization.

Q30. The most frequently encountered impediment to international trade for small and medium-sized manufacturers is ________.

a. foreign sales are not sufficiently profitable

b. transportation and shipping costs

c. language and cultural barriers

d. foreign regulations

Q31. Arturo, a sales representative for a small manufacturer, works out of an office in his home, using his laptop computer, a fax machine, and a beeper to communicate with the home office, which is located in a city 58 miles away. Arturo actually goes to the main office, on average, once every 10 to 14 days. His company is using which work arrangement?

a. Job sharing

b. Flextime

c. Flexplace

d. Job enrichment

Q32. Which of the following best represents the three phases of an effective job interview?

a. Breaking the ice, asking informative questions, and providing as much information about the company (good and bad) as possible.

b. Breaking the ice, asking informative questions, and selling the candidate on the company.

c. Breaking the ice, asking informative questions, and selling the candidate on the company regardless of their potential fit.

d. Breaking the ice, asking questions in an interrogative manner, and selling the candidate on the company.

Q33. Leadership deals with doing things right; management deals with doing the right things.

a. True

b. False

Q34. The job ________ design strategy involves cross-training workers so they can move from one job in the company to others, giving them a greater number and variety of tasks to perform.

a. simplification

b. enlargement

c. enrichment

d. rotation

Q35. Effective leaders know that what they do is more important than what they say because they set the example for their employees.

a. True

b. False

Q36. A job ________ identifies the duties and responsibilities of a position and its working conditions, while a job ________ identifies the qualifications required of the job candidate in terms of skills, education, and experience needed.

a. specification; description

b. description; specification

c. analysis; specification

d. analysis; description

Q37. A ________ is the process by which a company determines the duties and the nature of the jobs to be filled and the skills and experience required of the people who are to fill them.

a. job analysis

b. job description

c. job specification

d. management audit

Q38. Both leadership and management are essential to a small company's success, but leadership comes first.

a. True

b. False

Q39. The type of job design that breaks work down into its simplest form and standardizes tasks is known as ________.

a. job simplification

b. job enlargement

c. job rotation

d. horizontal job loading

Q40. The Equal Employment Opportunity Commission (EEOC) supplies employers with a list of questions it considers illegal in interviews.

a. True

b. False