1fblapbl/documents/bizdeci… · Web viewMark the correct answer on your scantron sheet for each of the following questions. Effective leaders are noted for their B . ability to

PBL Business Decision Making 2002 NLC

Mark the correct answer on your scantron sheet for each of the following questions.

1. Effective leaders are noted for their a. ability to get their followers to do what they cannot, or will not, do.b. ability to provide guidance based on values for making decisions.c. willingness to assign responsibility while retaining authority. d. focused seriousness in achieving goals, working hard, and then harder.

2. Entrepreneurs are best described as having a. an external locus of control.b. high-risk assuming tendencies.c. an internal locus of control.d. a heavy reliance on chance.

3. To increase the effectiveness of communication between the small business owner and his or her employees, the owner should practice a. selective listening.b. being more sympathetic when listening.c. giving as much information as possible in each communication.d. telling the truth and encouraging feedback.

4. Most new products introduced on the market a. are adaptations of existing goods.b. are unique.c. employ significant levels of new technology.d. are breakthrough innovations.

5. All of the following are skills needed by the entrepreneur except a. technical skills.b. business management skills.c. bureaucratic skills.d. personal entrepreneurial skills.

6. The spirit of entrepreneurship within an existing organization is called a. venture formation.b. intrapreneurship.c. entrepreneurship.d. a joint venture.

7. The typical corporate culture has a climate and reward system that favors a. risk taking.b. conservative decision making.c. innovation.d. obsequiousness.

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8. John is hiring a staff to help grow his company. He is delegating authority to key people, but retains final decision-making authority. John is using the _____ style of management. a. craftsmanb. coordinatorc. small partnershipd. entrepreneur-plus-employee team

9. John is cross-training employees so they can move among several different jobs in order to provide more challenging work for them, and to make better use of their skills for the company. John is involved in job a. simplification.b. enlargement.c. enrichment.d. rotation.

10. As the venture becomes established, which of the following types of experience becomes increasingly important? a. Technicalb. Managerialc. Financingd. Marketing

11. John is comparing this month’s productivity and employee accident rates to the goals his boss set for him at the beginning of the year. John is at what point in the feedback loop? a. Comparing performance against standardsb. Deciding what to measurec. Deciding how to measure performanced. Conducting a performance appraisal

12. In which stage of the product planning and development process is it appropriate to show a prototype to a panel of potential customers? a. Idea stageb. Concept stagec. Product development staged. Commercialization stage

13. The initial registration for a trademark lasts a. 10 years.b. 14 years.c. 18 years.d. 20 years.

14. Authors and publishers of software are protected under a. copyrights.b. trademarks.c. utility patents.d. trade secrets.

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15. The best protection against product liability is a. product warranty insurance.b. to overstate the benefits of a product.c. to produce safe products.d. the utility patent.

16. The business plan’s primary purpose is to a. develop future new technologies.b. guide the entrepreneur.c. avoid competitive reactions.d. provide a historical perspective of the venture.

17. The depth of a business plan depends on the a. target audience.b. experience of the entrepreneur.c. size and scope of the new venture.d. amount of capital needed.

18. Distribution, pricing, and promotion of the product are discussed in which section of the business plan? a. Marketingb. Productionc. Merchandisingd. Organization

19. The Organization section of a business plan describes the business’ a. physical plant and layout.b. location.c. system of distribution.d. form of ownership.

20. Which of the following documents is not usually included in the financial section of a business plan? a. Statement of cash flowb. Income statementc. Projected balance sheetd. Price lists from suppliers

21. All of the following are business plan features that interest investors except a. evidence of focus.b. evidence of customer acceptance of the venture’s product or service.c. evidence of a need for custom engineering.d. evidence of the investors’ required rates of return.

22. Many new businesses fail due to lack of a. cash.b. planning.c. initiative.d. customers.

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23. Which of the following is a factor that could result in the failure of a business plan? a. Goals set by the entrepreneur are measurable.b. The entrepreneur has limited experience in the planned business.c. Goals set by the entrepreneur are reasonable.d. Customer need was established for the product.

24. All of the following are parts of the marketing mix except the a. product.b. price.c. promotion.d. packaging.

25. Cash flow is the a. same as profit.b. result of subtracting expenses from sales.c. difference between cash receipts and cash payments.d. sum of cash receipts and cash payments.

26. The basic balance sheet relationship is a. assets equals liabilities, plus owner’s equity.b. assets, plus owner’s equity, equals liabilities.c. assets, plus liabilities, equal owner’s equity.d. assets, minus liabilities, equal owner’s equity.

27. Which of the following would not be a current asset? a. Certificates of deposit that mature in six monthsb. Customer receivablesc. Cash receipts d. Supplier bills payable in thirty days

28. Financial projects to assess the impact of different scenarios on a new business are calculated using a. a spreadsheet program.b. an inventory management program.c. the Internet.d. a graphics program.

29. All of the following are everyday roles that entrepreneurs should play except a. allocator of resources.b. adaptor to change.c. negotiator.d. lawyer.

30. The legal form of business with the most alternatives for raising capital is the a. proprietorship.b. corporation.c. limited partnership.d. full partnership.

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31. Which of the following statements best describe an entrepreneur with a marketing orientation? a. Concentrating on producing as much as possible b. Focusing on sales techniques c. Concentrating on moving inventoryd. Focusing on the customer’s needs and wants

32. Typically, debt financing requires a. an asset as collateral.b. a degree of ownership in the firm.c. reduction of short-term assets.d. reduction of working capital.

33. In _____ the entrepreneur sells equipment to the lender, then arranges for its continued use. a. a factoring arrangementb. trust receiptsc. a sale-leaseback arrangementd. cash flow financing

34. Which of the following is not one of the five C’s of lending? a. Characterb. Cautionc. Conditionsd. Capacity

35. The objectives of venture capitalists and entrepreneurs are a. the same.b. frequently at odds.c. brought into sync by common problems.d. part of the mission statement for a new business.

36. Which factor in valuing a company is the most important? a. Future earnings capacityb. Book valuec. Outlook of the economyd. Market price of similar companies’ stock

37. The valuation approach that gives the lowest or most conservative value of the business is a. book value.b. present value of future cash flows.c. earnings approach.d. liquidation value.

38. Preparation of a monthly cash flow statement is recommended in order to a. periodically assess the company’s profit position.b. adjust pro-forma statements for the remaining months.c. determine inventory levels.

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d. assess needs for using a accountant.

39. The _____ is used to measure the short-term solvency of a venture. a. current ratiob. average collection periodc. debt ratiod. return on investment

40. The least liquid current asset, _____, is eliminated when calculating the acid test ratio. a. cashb. accounts receivablec. inventoryd. land

41. The _____ is calculated by dividing liabilities by total assets. a. current ratiob. debt ratioc. inventory turnoverd. net profit margin

42. The final step in the strategic planning process is a. statement of long-term vision.b. development of action plans.c. feedback and control.d. strategy formulation.

43. The person offering the franchise is the a. franchisatory.b. franchisor.c. franchisee.d. franchise.

44. The most serious direct threat to small businesses is the a. expansion of information technology.b. emergence of a global economy.c. growth of Superstores.d. availability of inexpensive access to the Internet.

45. All of the following are advantages of franchising except a. franchise fees.b. availability of management expertise.c. product acceptance.d. knowledge of the market.

46. The most severe form of bankruptcy is a. chapter 7.b. chapter 11.c. chapter 13.d. prepackaged bankruptcy.

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47. Studying different legal forms for a new small firm a. can make great differences in taxes and liabilities.b. is unnecessary because there are no advantages between the different legal forms for

small firms.c. is a waste of time because most small firms should be sole proprietorships.d. is only important for retail businesses.

48. When studying a location for a new business, it is clear that a. a good entrepreneur will be successful in any location.b. the rent charged should be the primary consideration.c. different locations will provide different sales results.d. major cities usually provide the best locations.

49. One often overlooked advantage of buying an ongoing business is a. assured acceptance by the community.b. guaranteed suppliers.c. employees that are already trained.d. elimination of one competitor.

50. Which one of the following would be considered a disadvantage of purchasing a franchise? a. Provision of sound management procedures by the franchiserb. Obligatory purchases from franchiserc. Possible financial aid by franchiserd. Reduced risk by handling tested products

51. The best definition of current liabilities is a. debts which are secured by collateral.b. debts which will be paid within 30 days.c. debts payable within 90 days.d. debts due within one year.

52. A proprietorship ratio of 50 percent indicates a. a small amount of debt.b. a very weak financial position.c. that creditors “own” the firm.d. owners have an investment equal to half the capital.

53. The quick ratio a. is concerned only with cash on hand.b. considers cash and accounts receivable.c. always includes the inventory value.d. relates to net worth.

54. The _____ becomes the document that summarizes the analysis that has been done to justify a new business. a. business planb. cash budgetc. pro forma

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d. financial statement

55. A business plan allows the entrepreneur to a. record his or her plans for the business in the future.b. focus on the internal elements of the business.c. think a business idea through, considering both its positive and its negative aspects.d. strategically supplement operational plans once financing is secured.

56. A well-developed business plan provides the entrepreneur with a number of benefits, such as a. a way to identify probable financial backers.b. a valuable tool for recruiting management to help in running the business.c. assisting the entrepreneur in going public with his or her new venture on the stock

market.d. determining the principle risks confronting the business.

57. The primary purpose of developing a business plan is to a. raise capital.b. attract potential employees.c. provide direction. d. meet requirements designed to protect lenders.

58. A business plan a. reduces the risk and uncertainty involved in starting a new company.b. is a guarantee of success for the small company.c. should be written by professionals in consultation with the owner.d. should be kept in outline form to avoid over structuring the company.

59. The _____ expresses the entrepreneur’s vision for the company and what he or she hopes it will become. a. executive summaryb. mission statementc. industry analysisd. marketing strategy

60. The most common reason cited by banks for rejecting small business loans is a. poor credit history.b. under capitalization or too much debt.c. lack of collateral.d. insufficient cash flow or poor profitability.

61. Proving that a profitable market exists involves a. providing that customers in the marketplace have a need for the good or service, and

are willing to pay for it.b. honestly comparing your firm’s products with a competitor’s products, showing your

advantages.c. explaining how you will achieve your business objectives and market share goals.d. showing the linkage between your plan of operation and your financial profitability.

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62. Any assets pledged to the bank as security for repayment of the loan are the _____ of the five C’s. a. collateralb. capacityc. capitald. conditions

63. The intangible C that lenders examine in evaluating the business plan is that of a. capital.b. character.c. collateral.d. capacity.

64. _____ pricing strategy introduces a new product at a low price to gain quick acceptance and extensive distribution in a mass market. a. Penetrationb. Skimmingc. Discountd. Sliding-down-the-demand-curve

65. _____ is a technique which greatly simplifies the pricing function by setting the same price for items with similar characteristics. a. Odd pricingb. Leader pricingc. Price liningd. Geographical pricing

66. _____ is a technique in which a small firm sets very high prices for a limited period before reducing them to more competitive levels. a. Odd pricingb. Skimming c. Price liningd. Suggested retail pricing

67. If an item costs a small business owner $15, and the desired markup on it is 50 percent, its retail price would be a. $22.50.b. $25.00.c. $30.00.d. $35.00.

68. The simplest and least expensive way to conduct international business is through a. the Internet.b. foreign licensees.c. joint ventures.d. trade intermediaries.

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69. The United States has decided to place a tax on all imported steel. What word best describes what the government has done? a. Embargob. Tariffc. Quotad. Nontariff barrier

70. The _____ forbids contracts that restrain trade or create monopolies. a. Clayton Actb. Sherman Anti-Trust Actc. Robinson-Patman Actd. Miller-Tydings Act

71. The Robinson-Patman Act focuses on a. price discrimination.b. product warranty.c. product liability.d. unsafe products.

72. The Truth-in-Lending Act a. applies to all installment contracts with more than two payments.b. prohibits discrimination in granting credit.c. requires a lender to disclose the total cost of credit or a loan.d. prohibits certain behavior on the part of a lender when trying to collect bad debts.

73. John is looking for capital to purchase new buildings and equipment for his small manufacturing company. John is looking for _____ capital. a. workingb. fixedc. growthd. asset-based

74. _____ capital is the pool of temporary funds of the business used to support the normal operation of the business on a short-term basis. a. Growthb. Fixedc. Equityd. Working

75. The most common source of equity funds used to start a small business is a. private investors, or “angels.”b. loans from commercial banks.c. the entrepreneur’s pool of personal savings.d. public stock issues.

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76. The money John uses to buy inventory for the upcoming Christmas season would be classified as _____ capital. a. growthb. workingc. fixedd. efficiency

77. Probably the biggest disadvantage of “going public” to the entrepreneur is the a. dilution of ownership interest.b. diminished corporate image.c. future threat of being acquired through the use of stock.d. loss of key employees.

78. The most common method used by commercial finance companies to provide credit to small businesses is a. asset-based.b. insurance-based.c. unsecured lines of credit or character loans.d. balance-sheet based.

79. Savings and loan associations typically specialize in loans for a. equipment.b. inventory.c. real property.d. accounts receivable.

80. The various groups who affect, and are affected by, the decisions and actions of a business are called a. suppliers.b. stakeholders.c. minorities.d. intermediaries.

81. Those who possess the most control over individual behavior within a small company are its a. customers.b. managers/owners.c. employees.d. human resource managers.

82. A number of things can be done in order to integrate ethical principles into a company, such as a. limiting diversity in hiring.b. establishing a legalistic and rigid set of rules.c. creating a one-way communication culture, clearly communicating expectations.d. the conduct of top managers setting impeccable ethical examples.

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83. Small businesses have a number of financial responsibilities to their investors including a. selling a high-quality product at a reasonable price.b. observing all government requirements for product manufacture.c. earning the lowest profits at the highest costs of production.d. providing an attractive return on their investments.

84. In comparison to a large business, in which of the following areas is a small business better suited to respond? a. Environmentalismb. Social Responsibilityc. Consumerismd. Localization

85. Baker Industries makes an annual donation of $10,000 to local charities, and allows its top managers leaves of absence to serve charities involved in community service. What area of social responsibility is Baker Industries demonstrating? a. Customerb. Environmentc. Employeed. Community

86. If your ethical conduct is based on treating other people the way you expect them to treat you, you are using a. the family test.b. the professional ethic.c. Kant’s categorical imperative.d. the golden rule.

87. John disapproves of an advertising campaign featuring scantily clad models in suggestive poses with his company’s product. John is practicing _____ ethical management. a. immoralb. amoralc. morald. socially responsible

88. The majority of loans provided by the SBA are a. direct.b. preferred.c. guaranteed.d. immediate participation.

89. The act that is the foundation on which antitrust policy in the U. S. is built is the a. Clayton Act.b. Sherman Anti-Trust Act.c. Robinson Patman Act.d. Miller-Tydings Act.

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90. The _____ states that a seller cannot require a buyer to purchase only his or her product to the exclusion of other competitive sellers’ products. a. Clayton Actb. Sherman Anti-Trust Actc. Robinson Patman Actd. Miller-Tydings Act

91. This act was passed by Congress to supplement the Clayton Act, providing the power to prevent “unfair methods of competition in commerce, or unfair or deceptive acts in commerce.” a. The Federal Trade Commission Actb. The Sherman Anti-Trust Actc. The Robinson Patman Actd. The Miller-Tydings Act

92. The _____ introduced an exception to the Sherman Anti-Trust Act, permitting the use of fair trade agreements. a. Federal Trade Commission Actb. Sherman Anti-Trust Actc. Robinson Patman Actd. Miller-Tydings Act

93. A corporation that still retains its limited liability advantage and is taxed as either a sole proprietorship or a partnership is known as a a. subchapter X corporation.b. small business corporation.c. subchapter S corporation.d. This type of business plan does not exist

94. A tax imposed on gas or tobacco is which type of tax? a. Value-added taxb. Sales taxc. Consumer taxd. Excise tax

95. Which of the following are taxed as if they were partnerships? a. Small corporationsb. Medium-sized corporationsc. P corporationsd. S corporations

96. John purchased a house ten years ago for $80,000. This year he sold the house for $120,000. For tax purposes, the $40,000 difference would be considered a. a capital loss.b. profit.c. a capital gain.d. income that is not taxable.

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97. The owner of a small auto repair knowingly installs a used water pump in your car and tells you it is brand new. This is a. fraud.b. duress.c. misrepresentation.d. breach of contract.

98. Investors look for ____ as the most important ingredient in the potential success of any business. a. innovationb. a growth industryc. a competitive edged. competent management

99. John is a human resources manager. He is conducting an orderly and systematic evaluation of all the facts about a new position in order to determine what kind of employee to hire and how to compensate the position. This is called a a. job description.b. human resource plan.c. job specification.d. job analysis.

100. Income statements for service firms a. show the exact same categories as a retail firm.b. has no operating expense section.c. omits the cost of goods sold section.d. can be confused with the balance sheet.

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2002 PBL BUSINESS DECISION MAKING ANSWER KEY

ANSWER ANSWER ANSWER ANSWER1. B 26. A 51. D 76. B2. C 27. D 52. D 77. A3. D 28. A 53. B 78. A4. A 29. D 54. A 79. C5. C 30. B 55. C 80. B6. B 31. D 56. D 81. B7. B 32. A 57. C 82. D8. D 33. C 58. A 83. D9. C 34. B 59. B 84. C10. B 35. B 60. B 85. D11. A 36. A 61. A 86. D12. C 37. D 62. A 87. C13. A 38. B 63. B 88. C14. A 39. A 64. A 89. B15. C 40. C 65. C 90. A16. B 41. B 66. B 91. A17. C 42. C 67. C 92. D18. A 43. B 68. A 93. C19. D 44. C 69. B 94. D20. D 45. A 70. B 95. D21. C 46. A 71. A 96. C22. B 47. A 72. C 97. A23. B 48. C 73. B 98. D24. D 49. D 74. D 99. D25. C 50. B 75. C 100. C

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1fblapbl/documents/bizdeci… · Web viewMark the correct answer on your scantron sheet for each of the following questions. Effective leaders are noted for their B . ability to