Midterm Exam 1: IT364 Entrepreneurship & Innovation
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Questions and Answers

What should a company consider when selecting advertising media?

  • Company's logo design, office location
  • CEO's favorite color, number of employees
  • CEO's personal hobbies, number of social media followers
  • Trading area size, customer characteristics (correct)

    • What is a natural part of the creative process?

  • Thinking
  • Innovation
  • Failure (correct)
  • Success

    • Which structure features elements of both a partnership and a corporation?

  • S corporation
  • Foreign corporation
  • Closely held corporation
  • Limited liability company (LLC) (correct)

    • Which area should a business plan presentation cover?

    <p>The problem your product or service solves</p> Signup and view all the answers

    What distinction is made only for federal income tax purposes?

    <p>S corporation</p> Signup and view all the answers

    What does an entrepreneur draw up to fulfill a company's mission?

    <p>Vision</p> Signup and view all the answers

    What method is used for determining the value of a business by using the price/earnings ratios of similar businesses?

    <p>Earnings approach</p> Signup and view all the answers

    Which terms correctly complete the following statement: '______ is thinking new things, and ______ is doing new things.'?

    <p>Innovation, Creativity</p> Signup and view all the answers

    What category of business refers to a business that employs less than 100 people?

    <p>Small business</p> Signup and view all the answers

    Which of the following is NOT a benefit of owning a small business?

    <p>Opportunity to be more stressed</p> Signup and view all the answers

    Which form of business ownership is designed for a business owned and managed by one individual?

    <p>Sole proprietorship</p> Signup and view all the answers

    What does 'Intellectual capital' refer to in business terms?

    <p>Intellectual capital</p> Signup and view all the answers

    What legal structure allows co-owners to share a business's assets, liabilities, and profits based on an established agreement?

    <p>Partnership</p> Signup and view all the answers

    What does UPA stand for in the context of business entities?

    <p>Uniform Partnership Act</p> Signup and view all the answers

    Which type of competitors offer some of the same products and services as the business?

    <p>Direct competitors</p> Signup and view all the answers

    What is a corporation called when it conducts business in the state where it is incorporated?

    <p>Domestic corporation</p> Signup and view all the answers

    Which of the following methods are used for preparing an advertising budget?

    <p>Affordable, competitor matching, percentage of sales, objective-and-task</p> Signup and view all the answers

    What factors are considered when determining the right price for a product or service?

    <p>Cost structure, market assessment, desired image</p> Signup and view all the answers

    What is a key characteristic of pure franchising?

    <p>Complete business system provided</p> Signup and view all the answers

    What is one potential drawback of owning a small business related to income?

    <p>Guaranteed monthly salary</p> Signup and view all the answers

    In pure franchising, what aspect can the franchiser impose rules on?

    <p>Store style</p> Signup and view all the answers

    What contributes to the lower quality of life when owning a small business according to the text?

    <p>Lower pay at the beginning</p> Signup and view all the answers

    Which drawback of owning a small business is related to being liable for all debts and losses?

    <p>Risk of losing invested capital</p> Signup and view all the answers

    What potential issue might lead to discouragement in a small business owner?

    <p>Motivation loss midway</p> Signup and view all the answers

    What is one goal of the seller in negotiating a deal for selling a business?

    <p>Avoid unreasonable contract terms that might limit future opportunities</p> Signup and view all the answers

    In the context provided, who are referred to as scalable entrepreneurs?

    <p>Entrepreneurs who create multiple companies simultaneously</p> Signup and view all the answers

    What type of franchising involves only using the brand name without restrictions on store management or advertising?

    <p>Trade-name franchising</p> Signup and view all the answers

    In product distribution franchising, what rights are granted to the franchisee?

    <p>Rights to promote and sell franchiser's products</p> Signup and view all the answers

    Which of the following is not a characteristic of trade-name franchising?

    <p>Franchisee gets support regarding business system</p> Signup and view all the answers

    What distinguishes serial entrepreneurs based on the text provided?

    <p>They create and run multiple businesses concurrently</p> Signup and view all the answers

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