Deck 3: Entrepreneurship, New Ventures, and Business Ownership

Question 1

Business incubators are facilities that successful, established businesses purchase in an attempt to diversify their product offerings.

Answer 1

False

Question 2

Most U.S. workers are employed by a large business.

Answer 2

False

Question 3

Most small businesses are involved in manufacturing.

Answer 3

False

Question 4

Companies develop a cash budget to predict sales revenues.

Question 5

The preparation and use of a business plan is a relatively new idea.

Question 6

Although a sole proprietorship is usually small, it may be as large as a steel mill or a department store.

Question 7

Partnerships are legally required to file a copy of their partnership agreement with the court within one year of formation.

Question 8

The biggest advantage facing owners of corporations is unlimited liability.

Question 9

A cash budget shows how much money will be needed once the business starts to earn a profit.

Question 10

Venture capital and loans are becoming easier to get.

Question 11

When starting a small business, the entrepreneur must _____.

A) commit to make the business successful
B) choose an industry and market with potential
C) match business trends and conditions with his/her abilities and interest
D) all of the above

Question 12

Franchising is _____.

A) on the increase in the United States
B) declining in the United States
C) being replaced by contract manufacturing in the United States
D) not a significant part of the retail sector

Question 13

In most cases, venture capitalists _____.

A) provide money to start new businesses
B) lend money to profitable businesses at a set rate
C) supply capital in return for partial ownership
D) don't provide funds to fuel expansion

Question 14

The SBA bases its definition of small business on _____.

A) number of suppliers
B) total annual sales
C) number of employees
D) B and C

Question 15

According to the text, which of the following is NOT identified as a major small business industry group?

A) services
B) retailing
C) wholesaling
D) electronics

Question 16

Which of the following sources of funds is more likely to be used to help with the purchase of an existing business?

A) venture capitalists
B) capital markets
C) money markets
D) lending institutions

Question 17

An SBA-sponsored program in which a small business can borrow from a commercial lender is known as a(n) _____. .

A) SNDC program
B) guaranteed loan program
C) local development company program
D) advisory programs

Question 18

Under the _____, the SBA and the bank each put up a share of the money to finance the small business.

A) guaranteed loans program
B) local development companies program
C) immediate participation loans program
D) long-term progressive loan program

Question 19

A _____ allows employees to own a significant share of the corporation through trusts established on their behalf.

A) strategic alliance
B) ESOP
C) EEOC
D) Takeover

Question 20

A strategy in which a firm decides to take a part of its existing business operations and either sell it to another corporation or set it up as a new independent corporation is called a(n) _____.

A) merger
B) takeover
C) acquisition
D) divestiture

Question 21

When a firm sells part of itself in order to raise capital, it a(n) _____.

A) ESOP
B) divestiture
C) spin-off
D) merger

Question 22

According to the SBA, small businesses supply _____ of all "innovations" introduced into the American marketplace.

A) 10 percent
B) 25 percent
C) 55 percent
D) 80 percent

Question 23

Of the new businesses started in the past decade, what percent were started from scratch?

A) 15 percent
B) 25 percent
C) 55 percent
D) 64 percent

Question 24

Under the _____, the SBA works with a local corporation devoted to boosting the local economy.

A) guaranteed loans program
B) immediate participation loans program
C) venture capital subsidy program
D) local development companies program

Question 25

Over the last ten years, _____ new businesses have failed per year.

A) 5,000 to 10,000
B) 10,000 to 25,000
C) 50,000 to 100,000
D) more than 200,000

Question 26

In the 1990s, Hispanic-owned businesses grew by _____.

A) 162 percent
B) 172 percent
C) 75 percent
D) 20 percent

Question 27

A summary of the company's financial health communicated with stockholders and potential investors is contained in the _____.

A) proxy
B) newspaper
C) company magazine
D) annual report

Question 28

In some Asian countries, the entrepreneurial spirit is often tempered by the need for consensus. The entrepreneurial spirit in the United States is much different. Describe it.

Question 29

How might an American company looking to set up operations in Japan utilize a venture capital company?

Question 30

How might the emergence of electronic commerce benefit international business?

Question 31

How have some consumers viewed FreshDirect's use of electronic commerce negatively?

Question 32

Might FreshDirect be defined as a small business? Explain.

Question 33

What are likely to be some of the reasons for FreshDirect's success?

Question 34

QuickFoods, a competitor of FreshDirect, is interested in acquiring FreshDirect. In what way is this a different arrangement than with a merger?