One of the most important things a firm founder can do is

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Question 1


plan for the end of the firm
establish a strong ethical culture
look for tax loopholes
constantly monitor the competition


Question 2

Which types of unethical behavior are common in the workplace?

all are common


Question 3

This is the formal statement that organizations use to demonstrate their values on ethical and social issues.

moral code
code of conduct


Question 4

This situation involves doing something that is beneficial to oneself or the organization, but it may be unethical.

ethical dilemma
significant moment



Question 5

Which item is not a potential payoff for firms that establish a strong ethical culture?

potential avoidance of fines
improved employee commitment
improved customer loyalty
higher profits



Question 6

This advice is the key piece of information to know in order to avoid legal disputes.

get it in writing
meet all obligations
hire an attorney
keep business licenses current


Question 7

This document includes information regarding how the founders will be compensated for their sweat equity, how long the founders must remain in order for their shares to fully vest, and the relative split of equity among the firm founders.

initial contract
founders’ agreement
articles of incorporation
owners disclosure document


Question 8

This form of business ownership is the most simple and the easiest to create.

limited liability company
sole proprietorship


Question 9

Financial management does not deal with which topic?

raising money
managing company finances
achieving a high rate of return


Question 10

This term refers to how easily the firm can meet its cash obligations.

accounts receivable


Question 11

When looking at the overall financial health of a firm for stability, this ratio is key.

itemized analysis


Question 12

Financial ratios can be used to compare the firm to:

past performance
industry norms
all the above


Question 13

Assets, liabilities and owners equity are included in the:

income statement
balance sheet
statement of cash flows
annual reports


Question 14

The statement of cash flows includes all of the following categories except:

operating activities
investing activities
financing activities
equity activities


Question 15

This point for a firm is where it turns from a loss situation to a profit situation.

inflection point
break even point
point of no return
regression point


Question 16

This type of financial statement looks forward with forecasts for the future.

future form
pro forma



Question 17

Which reason is not a typical one for new venture funding?

lengthy product development cycles
capital investments
cash flow challenges



Question 18

Which statement is true?

Most entrepreneurs deal with the process of raising capital in a well planned way.
Most entrepreneurs deal with the process of raising capital haphazardly.
Most entrepreneurs have much experience raising capital.
Most entrepreneurs study how to raise capital before they start their business.



Question 19

Sources of personal financing for a business do not include:

friends and family funding
personal funds
bank funding


Question 20

Which step is last in the process to prepare for debt or equity financing?

determine how much money is needed
determine the most appropriate type of financing or funding
develop a strategy for engaging potential investors or bankers
internet research


Question 21

People who invest their personal capital directly in start-ups are called:

business angels
venture capitalists
wealth management experts
commercial investors


Question 22

This process is necessary for business owners in order to investigate the merits of a potential venture and verify the claims made in the business plan.

legal confirmation
background research
due diligence
fact checking


Question 23

Raising money for a business from large numbers of people, often online,  is referred to as:

alternative financing
business roundtable
net investing


Question 24

Businesses can apply for this type of funding if they meet certain criteria and use the money in a way that is required by the funder. Follow up reports are sometimes required after the funding is secured.



Question 25

This part of marketing requires the business owner to break the market down into customer groups and decide which one is most important for the business.



Question 26

This is the label for the group of customers that the business owner has decided to focus on.

primary market
focal market
target market
after market


Question 27

Small businesses especially need to create this in order to stand out from the competition.

customer service
innovative products
fresh advertising
unique market position


Question 28

Which P did we add in class to the original 4 Ps of Marketing?



Question 29

This is the most common form of promotion for a product or service.

point of sale displays


Question 30

This type of marketing encourages people to pass along a marketing message about a particular product.

website hopping
viral marketing
virtual marketing


Question 31

A low budget approach to marketing with unusual tactics is called:

guerilla marketing
fast marketing
extreme marketing
nontraditional marketng


Question 32

At which step of the sales process does the sales person ask a question to try and get the potential customer to commit to buying the product or service?

qualify the lead
prospect for sales leads
close the sale
follow up


Question 33

Growth in revenues and profits over a period of time is called:

initial growth
sustained growth
market growth
financial growth


Question 34

Which statement is true?

Only large businesses can handle fast growth.
A business should aim for fast growth.
A business cannot grow too fast.
A business can grow too fast.


Question 35

We can say that business success:

always creates more business success
does not always scale well
indicates that prices should be raised
should always be followed by more business growth


Question 36

Which is not a warning sign that a business is growing too fast?

productivity is increasing
over stretched staff
declining product quality
borrowing money to pay for routine operating expenses


Question 37

Good reasons to grow a business include all of the following except:

capturing economies of scale
capturing economies of scope
market leadership
to compensate for declining sales


Question 38

In this chapter we added a segment to the Product Life Cycle in the middle. This stage is called:

innovation period
advanced growth
continuous growth
advanced sales period


Question 39

Adverse selection is when:

it is difficult to find employees with the right skills with the right management
it is difficult to perform background checks on all employees
it is hard to keep employees from being hired by competitors
is it hard to keep employees from leaving the firm


Question 40

Moral hazard refers to:

not all employees follow the code of conduct
it is difficult to determine if employees will fit in to the company culture
it is hard to assess employees’ morals and ethics
as a firm grows new hires may not share the same values as the firm’s founders