ENT 3315 Test 2

Small business marketing involves a member of activities, including
creating, developing, preparing, communicating, and delivering a bundle of satisfaction to a larger market
Traditionally, marketing philosophies have been categorized as
consumer-oriented, productive-oriented, and sales-oriented
What is the proper order of the steps in the typical research process
1. Interpreting the data gathered
2. Identifying the informational need
3. Collecting primary data
4. Searching for secondary data
2,4,3,1
Forecasting sales for a new venture will be the most difficult when
the owner is unfamiliar with quantitative analysis
Unlimited liability for business debts is imposed on
sole proprietors
A corporation
is chartered under state laws
Large manufactures have been known to form strategic alliances with small manufactures in order to benefit from the smaller firms
operational expertise
Linda has assembled a list of potential board of directors. Who should she not include
her attorney
Facilities that rent shared space, services and management only to new businesses are called
business incubators
An example of special-purpose equipment for a carbonated beverage company is a
bottling machine that adjusts pressure for different flavors
Rod is locating his architecture business at his home in a rural area. Which professional should he contact before starting?
All of the above (CPA, city’s planning and zoning, his insurance agent)
Revenues from auction sites are derived for the most part from
Listing fees and commissions on sales
Interest expense is deducted from the (blank) to arrive at the company’s profits before taxes
operating profits
The “bottom line” of the income statements is affected by all of the following except
dividends paid to owners
Assets that are relatively liquid are classified as
current assets
The balance sheet and income statement are separate reports, but actually
complement each other
If a firm’s current ratio improves from 1.5 to 2.8, what has happened
current liabilities have decreased
Yvonne is planning a doughnut shop. The cost of producing the donuts should be included in the
costs of goods sold
The greater a firm’s sales, the greater need for financing because of greater (blank) requirements
asset
Jill’s business has current assets of $50,000 and current liabilities of $25,000. Which state is true about the company’s current ratio?
The ratio is 2 and is acceptable for most industries
No single planning document is more important in the life of a company than the
cash budget
The tradeoffs that must be understood between debt or equity financing include all of the following except
return on assets
A loan covenant is very unlikely to require
A fixed business strategy
The assets most commonly used for security by asset-based lending companies
equipment and buildings
Ellie is using a governmental program to help finance her new business. Her company is not eligible for a loan through a normal lending channel and is receiving $120,000 with the SBA guaranteeing 90% of the loan. She also had to submit a loan application to the lender. Ellie is participating in the
7(a) Loan Guaranty Program
Small business marketing is best defined as the performances of distribution activities that affect the flow of goods and services from produces to consumer to user. T/F
True
Regardless of the type of business, the consumer-oriented marketing philosophy is the best choice among the competing alternatives. T/F
True
Personal interview surveys are attractive as a marketing research method because these are inexpensive to conduct. T/F
False
When a strategist divides the total market for a product and/or service into groups with similar needs, so that each group is likely to respond to the same marketing strategy, he or she is engaging in a practice called market segmentation. T/F
True
The concept of balance on the management team means that the entrepreneurs should not be wrapped up too much in one area, such as sale or production, but be well rounded. T/F
True
One of the disadvantages of the corporate form of organization is the limited liability of its owner. T/F
False
A partnership reports the income it earns to the IRS, but the partnership itself does pay any taxes. T/F
True
S corporations can have nonresident alien stockholders but no more than 50 members. T/F
False
A brick-and-mortar store is actually a general term that refers a retail outlet dealing in building supplies. T/F
False
If the cost of shipping the finished product is high, the factory should probably be located near a source of raw materials. T/F
True
To maximize sales and profits, a discount shoe store should create an atmosphere similar to higher price point shoe stores as the customers will expect the same atmosphere. T/F
True
The role of a website can range from merely offering content and information to enabling complex business transactions. T/F
True
The term earnings, profits, and income refer to different amounts on the income statement. T/F
False
Total assets less outstanding debt equals ownership equity. T/F
True
While an income statement reports a firm’s results over a given period of time, the cash flow statement is required to determine a firm’s overall financial position. T/F
False
Cash flows that investors either provide to or receive from the business are included in the cash flows from owners’ equity. T/F
True
To determine the debt ratio, the total debt is divided by the total assets. T/F
False
The projection of profits, asset requirements, financing requirements and cash flows are essential in determining whether a venture is economically viable. T/F
True
Profits reward an owner for investing in a company and constitute a primary source of financing for future growth. T/F
True
Many small firms have a tendency to overestimate the amount of capital the business requires when beginning operations. T/F
True
The cash budget is concerned only with dollars received and dollars paid out. T/F
True
Borrowing money rather than issuing common stock typically increases the potential for higher rates of return to owners. T/F
False
Approximately 1/2 of the financing for startups comes from personal savings. T/F
True
Lines of credit are legal obligations to provide capital. T/F
False
When a stock sale is restricted to private placement an entrepreneur can avoid many of the demanding requirements of the securities laws. T/F
True