Question 1

What are the advantages and disadvantages for a franchisee?

Accepted Answer

The advantages of franchising include ac...

Question 2

What is the advantage to starting a business from scratch instead of buying an existing business?

Accepted Answer

A)   There is a proven ability to attract customers.
B)   Profit is generated sooner.
C)   There is a stronger relationship with lenders and other stakeholders.
D)   There are no ill-effects from the previous owner.
E)   There is a clearer picture of what to expect in terms of start-up.

Question 3

When an investor is not interested in owning their own business, why do they need to understand entrepreneurship?

Accepted Answer

A)   To understand why someone would want to work so hard for a small return
B)   To determine the key characteristics of success
C)   To understand how to convert a great idea to a profitable idea
D)   To assess the market potential for up-and-coming businesses
E)   To learn how to set up a business plan

Question 4

Why would an organization divest some of its existing business operations?

Accepted Answer

A)   To focus more on its core business
B)   To create new partnerships
C)   Because the divested business is more valuable as a separate company
D)   To buy another firm outright
E)   To create a new company from several smaller ones

Question 5

Loans are the most important sources of money for new businesses.

Accepted Answer

A) True 
 B)False

Question 6

What is the MOST important advantage of general partnerships?

Accepted Answer

A)   The unlimited liability of the partnership
B)   The ability to grow with the addition of new talent and money
C)   The ease of implementing an effective control system
D)   The increased role of luck
E)   The need for minority partners

Question 7

Most businesses in the United States are large businesses with more than 500 employees.

Accepted Answer

A) True 
 B)False

Question 8

The failure rate among small businesses has been increasing in recent years.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following is an advantage of sole proprietorships?

Accepted Answer

A)   Ease in attracting a silent partner.
B)   Sales and expenses are treated as part of personal finances.
C)   It is easier to borrow money.
D)   There is increased continuity.
E)   Bills are paid out of pocket.

Question 10

Which of the following factors MOST contributes to small business failure?

Accepted Answer

A)   Managerial incompetence or inexperience
B)   Bad product design
C)   Legal problems
D)   Time spent raising capital
E)   Personnel issues

Question 11

Explain the role of a corporation's board of directors.

Accepted Answer

The board of directors is responsible fo...

Question 12

Corporations generate sales revenues proportionate to their number as compared to other forms of ownership.

Accepted Answer

A) True 
 B)False

Question 13

The U.S. Department of Commerce considers a business "small" if it has fewer than how many employees?

Accepted Answer

A)   10
B)   50
C)   100
D)   500
E)   1,500

Question 14

The least common type of partnership is the general partnership.

Accepted Answer

A) True 
 B)False

Question 15

In what type of ownership is an owner liable for debt, but only based on how much they invested?

Accepted Answer

A)   Master limited partnership
B)   Cooperative
C)   Limited partnership
D)   Corporation
E)   General partnership

Question 16

A new business should have enough capital to operate at least how many months without earning a profit?

Accepted Answer

A)   1
B)   2
C)   4
D)   6
E)   9

Question 17

Small businesses impact key aspects of the U.S. economy including

Accepted Answer

A)   bank loans, and contributions to big business.
B)   international trade and the service industry.
C)   bank loans and innovation.
D)   the service industry and job creation.
E)   job creation and innovation.

Question 18

Discuss four sources of financing for starting up a small business.

Accepted Answer

Financing for starting up a new business...

Question 19

What is the first step in becoming an entrepreneur?

Accepted Answer

A)   Deciding to proceed
B)   Formulating a business plan
C)   Identifying distinctive competencies
D)   Searching for capital to invest
E)   Implementing plans and opening

Question 20

Lending institutions are more likely to help finance the purchase of an existing business rather than the start-up of a business from scratch.

Accepted Answer

A) True 
 B)False

Exam 3: Entrepreneurship, New Ventures, and Business Ownership

Corporations generate sales revenues proportionate to their number as compared to other forms of ownership.

Correct AnswerverifiedShow Answer

Discuss four sources of financing for starting up a small business.

Correct AnswerverifiedFinancing for starting up a new business...View AnswerShow Answer

The least common type of partnership is the general partnership.

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What is the MOST important advantage of general partnerships?

Correct AnswerverifiedShow Answer

A new business should have enough capital to operate at least how many months without earning a profit?

Correct AnswerverifiedShow Answer

Explain the role of a corporation's board of directors.

Correct AnswerverifiedThe board of directors is responsible fo...View AnswerShow Answer

What is the first step in becoming an entrepreneur?

Correct AnswerverifiedShow Answer

When an investor is not interested in owning their own business, why do they need to understand entrepreneurship?

Correct AnswerverifiedShow Answer

Small businesses impact key aspects of the U.S. economy including

Correct AnswerverifiedShow Answer

In what type of ownership is an owner liable for debt, but only based on how much they invested?

Correct AnswerverifiedShow Answer

Which of the following is an advantage of sole proprietorships?

Correct AnswerverifiedShow Answer

What is the advantage to starting a business from scratch instead of buying an existing business?

Correct AnswerverifiedShow Answer

Which of the following factors MOST contributes to small business failure?

Correct AnswerverifiedShow Answer

What are the advantages and disadvantages for a franchisee?

Correct AnswerverifiedThe advantages of franchising include ac...View AnswerShow Answer

Why would an organization divest some of its existing business operations?

Correct AnswerverifiedShow Answer

Lending institutions are more likely to help finance the purchase of an existing business rather than the start-up of a business from scratch.

Correct AnswerverifiedShow Answer

Most businesses in the United States are large businesses with more than 500 employees.

Correct AnswerverifiedShow Answer

Loans are the most important sources of money for new businesses.

Correct AnswerverifiedShow Answer

The U.S. Department of Commerce considers a business "small" if it has fewer than how many employees?

Correct AnswerverifiedShow Answer

The failure rate among small businesses has been increasing in recent years.

Correct AnswerverifiedShow Answer

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Financing for starting up a new business...
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The board of directors is responsible fo...
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The advantages of franchising include ac...
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