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| 1 | |
Starting a business from scratch is called a buyout. |
| | A) | True |
| | B) | False |
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| 2 | |
A credit agreement that allows the borrower to pay all or part of the balance at any time, as the loan balance is paid off, it becomes available to be borrowed again is considered asset spending. |
| | A) | True |
| | B) | False |
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| 3 | |
To determine what the business to be in is the first step in creating a start-up business. |
| | A) | True |
| | B) | False |
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| 4 | |
Most new products and services fail to gain acceptance. |
| | A) | True |
| | B) | False |
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| 5 | |
Synergy is a combination in which the parts are greater than the whole. |
| | A) | True |
| | B) | False |
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| 6 | |
Going into competition with your employer is one way that you can go about obtaining committed customers prior to start-up. |
| | A) | True |
| | B) | False |
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| 7 | |
Purchasing an existing business requires more cash outlay than does creating a start-up. |
| | A) | True |
| | B) | False |
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| 8 | |
Certainty, not educated guesses, is the primary advantage of discounted cash flow methods. |
| | A) | True |
| | B) | False |
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| 9 | |
Rulistics are considered common-sense rules, a rule of thumb. |
| | A) | True |
| | B) | False |
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| 10 | |
______ is NOT a path to full-time business ownership. |
| | A) | Stand retail |
| | B) | Franchise |
| | C) | Start a new business |
| | D) | Buy an existing business |
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| 11 | |
______ is an advantage of a start-up. |
| | A) | Access to revolving credit |
| | B) | Initial name recognition |
| | C) | Time to establish and proved positive cash flow |
| | D) | Clean slate |
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| 12 | |
Something the business owns that has economic value or is expected to have economic value in the future is called a(n) |
| | A) | synergy. |
| | B) | revolving credit. |
| | C) | asset. |
| | D) | cash flow. |
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| 13 | |
______ is the person who starts a new business. |
| | A) | Founder |
| | B) | Asset |
| | C) | Loner |
| | D) | Turnkey |
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| 14 | |
Executive volunteers contribute their time and energy to assisting start-up and struggling small businesses as a public service in |
| | A) | franchising. |
| | B) | mentoring programs. |
| | C) | trade associations. |
| | D) | revolving credit. |
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| 15 | |
On average an entrepreneur suffered _____ start-up failures before achieving success according to one study of entrepreneurs who had successfully created a start-up business. |
| | A) | one |
| | B) | seven |
| | C) | three |
| | D) | five |
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| 16 | |
______ is a business that is created by separating parts of an operating business into a separate entity. |
| | A) | Franchise |
| | B) | Spin-off |
| | C) | Synergy |
| | D) | Turnkey |
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| 17 | |
Working with a partner can reduce the risks of start-up in which way? |
| | A) | Banks prefer partnered start-ups. |
| | B) | Partners eliminate the need to hire other employees. |
| | C) | Federal government provides subsidies to partnering situations. |
| | D) | Partners may provide capital, equipment, or advice. |
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| 18 | |
______ is a disadvantage of purchasing an existing business. |
| | A) | Existing managers and employees may resist change |
| | B) | Established customers will leave due to change |
| | C) | Purchasing a business is significantly more expensive than a start-up |
| | D) | Existing business processes are difficult to change |
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| 19 | |
______ is an advantage of purchasing an existing business. |
| | A) | Existing managers and employees may resist change |
| | B) | Established customers will leave due to change |
| | C) | Purchasing a business is significantly more expensive than a start-up |
| | D) | Business processes are already in place |
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| 20 | |
______ is NOT a suggested method to find businesses for sale. |
| | A) | Networking |
| | B) | Trade journals |
| | C) | Internet |
| | D) | Stock brokers |
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| 21 | |
"Let the buyer beware" refers to which of these? |
| | A) | Synergy |
| | B) | Spin-off |
| | C) | Caveat emptor |
| | D) | Angel investors |
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| 22 | |
The act of conducting interviews with the sellers of the business refers to which of the following? |
| | A) | Synergy |
| | B) | Due diligence |
| | C) | Caveat emptor |
| | D) | Angel investors |
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| 23 | |
Cash flow that has been reduced in value because they are to be received in the future is called |
| | A) | replacement value cash flows. |
| | B) | discounted cash flows. |
| | C) | earnings cash flows. |
| | D) | book value cash flows. |
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| 24 | |
______ refers to the amount for which an asset will sell, less the costs of selling. |
| | A) | Net realizable value |
| | B) | Replacement value |
| | C) | Earnings multiple |
| | D) | Book value |
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| 25 | |
______ are three basic forms of franchising. |
| | A) | Sole proprietorship, partnership, and corporation |
| | B) | Product, service, and mix-format |
| | C) | Trade name, product distribution, and business format |
| | D) | Regional, local, and global |
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