Deck 16: Financing and Leading the Enterprise

Question 1

Revenue is sales minus returns, rebates, and discounts.

Answer 1

True

Question 2

Which of the following is not a revenue model?

A) Transaction fee revenue
B) Advertising revenue
C) Product sales
D) Freemium revenue

Answer 2

Freemium revenue

Question 3

Etsy and many other ecommerce sites take advantage of this revenue model:

A) Subscription fee
B) Affiliate revenue model
C) Member fee
D) Product sales

Answer 3

Affiliate revenue model

Question 4

Open source companies like JBoss often make use of the product sales revenue model.

Question 5

What is a cost driver?

A) Factor that affects total firm costs
B) Fixed costs varying over time
C) Volume of output
D) Impact on profit

Question 6

Management salaries are an example of:

A) Variable costs
B) Semi-variable costs
C) Multi-variable costs
D) Fixed costs

Question 7

How does Google make most of its money?

A) Text based ads on search results
B) Leasing out servers
C) Premium search capabilities
D) Android OS

Question 8

The best conditions for profit occur when product cost is low, and ________ is high.

A) Price
B) Perceived value
C) Hockey stick growth
D) Market ownership

Question 9

Which of the following is a high margin, low volume company?

A) BMW
B) Amazon
C) Walmart
D) Toyota

Question 10

What is a blockbuster profit model?

A) Build a system that reuses a product in many forms
B) Create a low-cost product to offer low price per unit of value
C) Focus on creating a series of big winners
D) Find unmet customer needs and build a new business model

Question 11

Dropbox is this type of profit model:

A) New business model
B) Protected innovation
C) Installed base
D) Low cost

Question 12

Cash flow is the sum of retained earnings minus:

A) Depreciation provision made by the firm
B) Fixed costs
C) Profitability
D) Crunch capital

Question 13

Entrepreneurial intensity is the drive and committed nature of any good entrepreneur.

Question 14

What happened to Patagonia when it grew too quickly?

A) Toxic work environment
B) Cash used to meet demand-outpaced sales
C) Company fractured into two divisions
D) Lost advantages in regional economies

Question 15

Organic growth is growth enabled by internally generated funds.

Question 16

Which of the following is not a source of revenue growth?

A) Increased market capitalization
B) New product offerings
C) Acquisitions
D) Increased brand recognition

Question 17

Facebook's acquisition of Instagram was risky because it cost the company a quarter of the cash they had on hand.

Question 18

Venture capital firms typically do not realize the gains of their investment immediately because harvest plans typically have a horizon of five to ten years.

Question 19

Why did the VR startup Vrideo fail?

A) Major corporations entered the VR scene soon after their founding
B) VR headset makers refused to support their software
C) The hype around VR died and investors no longer saw the vertical as promising
D) Internal power struggles within the company caused mismanagement of funds

Question 20

What strategy does Tencent employ that is not as common among major western tech companies?

A) Software as a service
B) Refusal to cooperate with Chinese government
C) In-app purchases
D) Refusal to bundle software