1.1 - IT364 Midterm Exam 1 - Questions & Answers.pdf

Midterm Exam 1 Questions & Answers IT364 Entrepreneurship and Innovation Moussa Academy 00201007153601 WWW.MOUSSAACADEMY.COM I. Multiple Choice Questions / T & F 1. In a(an) ______, the co-owners (partners) legally share a business’s assets, liabilities, and profits according to the terms of an esta...

Midterm Exam 1 Questions & Answers IT364 Entrepreneurship and Innovation Moussa Academy 00201007153601 WWW.MOUSSAACADEMY.COM I. Multiple Choice Questions / T & F 1. In a(an) ______, the co-owners (partners) legally share a business’s assets, liabilities, and profits according to the terms of an established partnership agreement. a. Partnership b. C corporation c. Joint venture d. Sole proprietorship 2. a. b. c. d. The UPA stands for ______. Uniform Partnership Act Unified Privacy Act Unique Personal Act Universal Property Act 3. a. b. c. d. ______ offer some of the same products and services. Significant competitors Direct competitors Indirect competitors Core competitors 4. a. b. c. d. A corporation that conducts business in the state in which it is incorporated is a ______. Foreign corporation Publicly held corporations Alien corporations Domestic corporation 5. a. b. c. d. Which of the following are methods for preparing an advertising budget? Sales representative's opinion, weather forecast, market trends, customer's feedback CEO's hobbies, social media followers, office location, logo design CEO's preference, random selection, competitor's method, last year's budget Affordable, competitor matching, percentage of sales, objective-and-task 6. a. b. c. d. What factors determine the right price for a product or service? Logo size, CEO's book, mission statement Social media following, likes, CEO hobbies Cost structure, market assessment, desired image Color, weather, gold 7. a. b. c. d. One advantage of buying an existing business can be ______: Leverage the experience of the previous owner Obsolete or inefficient equipment and facilities Cash requirements Business is losing money 1|Page www.MoussaAcademy.com 00201007153601 8. In ______, semi-independent business owners pay fees and royalties to a parent company in return for the right to become identified with its trademark, to sell its products or services, and often to use its business format and system. a. Corporation b. Franchising c. Joint venture d. Partnership 9. a. b. c. d. What is the purpose of promotion in marketing? To increase the price of a product or service To lower the quality of a product or service To decrease the demand for a product or service To inform consumers about a product or service and influence them to make a purchase 10. One disadvantage of buying an existing business can be ______: a. Installed Equipment with known production capacity b. Low price c. Easier access to financing d. Paying for “ill will” 11. ______ is the aggregation of factors that differentiates a small business from its competitors and gives it a unique and superior position in the market. a. Experience b. Competitive advantage c. Strengths d. Creativity 12. What are the three types of information commonly used in data mining? a. Geometric, Demographic, and Psychotic b. Geographic, Demographic, and Psychographic c. Geothermal, Demographic, and Psychotic d. Geopolitical, Demographic, and Psychographic 13. ______ is a method for determining the value of a business that use the price/earnings ratios of similar businesses to establish the value of a company. a. Balance Sheet Technique b. Earnings approach c. Asset Approach d. Marketing approach 14. ______ is thinking new things, and ______ is doing new things. a. Creativity, Innovation b. Invention, Creativity c. Innovation, Creativity d. Creativity, Invention 2|Page www.MoussaAcademy.com 00201007153601 15. ______ refers to a business that employs less than 100 people. a. Small business b. Startup c. Medium business d. Mid-market 16. Which of the following is NOT correct regarding the benefits of owning a small business? a. Opportunity to gain control over your own destiny. b. Opportunity to do what you enjoy doing. c. Opportunity to reap impressive profits. d. Opportunity to be more stressed. 17. The ______ form of business ownership is designed for a business owned and managed by one individual. a. S corporation b. Joint venture c. Sole proprietorship d. Limited liability company 18. ______ refers to the knowledge and information a company acquires and uses to create a competitive advantage in its market segment. a. Financial capital b. Human capital c. Intellectual capital d. Structural capital 19. What is the price range for a product or service? a. The difference between the price of the product and the cost of production b. The highest possible price a customer is willing to pay c. The difference between the price floor and the price ceiling d. The average price of similar products or services in the market 20. Which of the following are questions that a company should consider when selecting advertising media. a. CEO's personal hobbies, number of social media followers b. CEO's favorite color, number of employees c. Trading area size, customer characteristics d. Company's logo design, office location 21. The ______ is a hybrid structure that features elements of a partnership and a corporation. a. Limited liability company (LLC) b. Closely held corporation c. Foreign corporation d. S corporation 22. ______ is a natural part of the creative process. e. Thinking f. Failure g. Innovation h. Success 3|Page www.MoussaAcademy.com 00201007153601 23. Which of the following areas should a business plan presentation cover? a. Your favorite color and hobbies b. Your company's mission statement c. The latest celebrity gossip d. The problem your product or service solves 24. A(An) ______ is a distinction that is made only for federal income tax purposes and is, in terms of its legal characteristics, no different from any other corporation. a. S corporation b. C corporation c. Publicly held corporations d. Closely held corporation 25. ______ is a road map an entrepreneur draws up of the actions necessary to fulfill a company's mission, goals, and objectives. a. Business plan b. Vision c. Strategy d. Strategic management 26. ______ refers to the ability of developing new ideas and discovering new ways of looking at problems and opportunities. a. Invention b. Creativity c. Innovation d. Entrepreneurship 27. In negotiating the deal, one goal of the seller can be ______ a. Sell the business at the lowest price possible b. Minimize the amount of cash paid up front c. Avoid unreasonable contract terms that might limit future opportunities d. Maximize the tax burden from the sale 28. ______ are those who create multiple companies and usually run more than one business simultaneously. a. Scalable entrepreneurs b. Social entrepreneurs c. Serial entrepreneurs d. Scalable startups 4|Page www.MoussaAcademy.com 00201007153601 II. Essay Questions 29. List out the various Franchising types and explain each in detail Three basic types: 1. Trade-name franchising You only get the ability and right to use the brand name as a franchisee, but the franchiser does not impose any rules nor make any recommendations regarding your store style, pricing, management and advertising, nor does they provide you with support regarding your business system. Example: having a large hypermarket that has the logo of a franchiser, but the aisle management and products may differ from one franchisee to the other. 2. Product distribution franchising You get the ability and right to promote and sell the products of the franchiser, but the franchiser does not impose any rules nor make any recommendations regarding your store style, pricing, management and advertising, nor does they provide you with support regarding your business system. Example: big sport clothing stores that sell different shoe brands like Nike, Adidas and so on. 3. Pure franchising (or comprehensive franchising or business format franchising) You get the ability to use the brand name, products and complete business system. The franchiser imposes rules on your store style, pricing, management and advertising. But they provide you with a complete business system that recommends pricing, products, services, training suggestions, and enforces quality control standards Example: McDonald’s franchise is the same across all regions, where the products are known (Big Mac for example) with the same pricing and roughly the same store outline. 30. Describe at least three potential drawbacks of owning a small business? 1) Uncertainty of Income: Your business might not be profitable, no guaranteed monthly salary. 2) Risk of losing your entire invested capital: Your whole business idea might fail and go bankrupt 3) Long hours and hard work: Making a business successful takes time and effort 4) Lower quality of life until the business gets established: Until the business is running itself, you might expect lower pay and hard, long hours of work 5) High levels of stress: You are always under the pressure to succeed\ 6) Complete responsibility: If you fail, you are liable to all debts and losses as well as the lost capital 7) Discouragement: You might lose motivation midway throughout your journey. 5|Page www.MoussaAcademy.com 00201007153601