Q&A Hero

Q: One potential problem with acquiring funds from friends and relatives is that they might feel they have the right to interfere in the management of the business. a. True b. False

Q: An advantage of work sampling is that: A) no observation is required. B) it involves study of the equipment only. C) a performance rating is necessary. D) the time spent observing the employee is relatively short. E) it is more effective than time studies when task times are short.

Q: A balloon payment a. is an up front payment to obtain a loan. b. may be required by the bank at about midway in the loan term. c. may be due at any time during the term of a loan. d. is used to lift (remove) a loan covenant.

Q: The tally sheet data from a work sampling study provides information regarding: A) the number of wasted motions. B) the level of difficulty in a motion. C) the percent of time spent on various tasks. D) the quality of the work environment. E) the number of micro-motions involved.

Q: A bank manager wants to determine the percent of time the bank's tellers are working and idle. He decides to use work sampling, and his initial estimate is that the tellers are idle 20% of the time. Approximately how many observations should be taken to be 95% confident that the results will not be more than 5% away from the true result? A) 6 B) 16 C) 44 D) 210 E) 246

Q: Venture capitalists restrict their investment in startup companies. a. True b. False

Q: What is a technique for estimating the percent of time a worker spends on various tasks? A) stopwatch time study B) simultaneous motion study C) work sampling D) standard elemental (historical) times E) predetermined (published) time standards

Q: LIBOR is _____ the prime rate. a. approximately equal to b. considerably higher than c. considerably lower than d. a lagging indicator of

Q: Goodwill is considered a intangible asset and is highly valued when securing a loan. a. True b. False

Q: Among the advantages of predetermined time standards are all EXCEPT which of the following? A) Unions accept them as fair. B) They are available before a task is actually performed. C) They can only be determined after work actually takes place. D) They can be established in a laboratory setting. E) No performance ratings are necessary.

Q: Predetermined time standards are an outgrowth of basic motions called: A) mini-movements. B) micro-motions. C) SAE standards. D) TMUs. E) therbligs.

Q: Sondra is a business angel who is looking for a start-up company in which to invest. Which company would she most likely invest in based on current research? a. A company that currently has fewer than 20 employees and has plans to grow b. A business out of her home state to diversify her risk c. A business in an industry in which she has no experience d. A company formed by a group of experts in the industry

Q: Therbligs are: A) the smallest unit of time used in methods time measurement exercises. B) the largest unit of time used in methods time measurement exercises. C) basic physical elements of motion as used in methods time measurement exercises. D) the full range of motions required to complete a job as used in methods time measurement exercises. E) the smallest amount of time required to complete a job.

Q: The basic factors that determine how a firm is financed are restricted to the firm's past economic performance, the nature of its assets, and the personal preferences of owner(s) with respect to the marketing mix. a. True b. False

Q: Therbligs: A) were invented by Frederick W. Taylor. B) were used during the scientific management era, and are no longer in use. C) are hyperactive rodent-like pets, whose name is associated with time standards. D) were named by Frank Gilbreth. E) are .0006 minutes in length.

Q: Many venture capitalists: a. prefer common stock in exchange for their investment. b. manage the liquidation of failed ventures. c. intend to cash out after five to seven years. d. insist on voting rights during stockholder meetings.

Q: A time measurement unit, or TMU, is: A) the same as a Therblig. B) 0.00001 minute. C) 0.00001 hour. D) the duration of the easiest GET motion. E) an historical experience standard.

Q: The five Cs of credit are character, capacity, capital, conditions, and collateral. a. True b. False

Q: Sample observations of a claims processor made over a 160-hour work month reveal that the worker produced a total of 384 completed claims forms. The performance rating was 80%. The worker was idle 20% of the time (so that idle time should be subtracted from the total time when computing the average observed time). The allowance factor is 8%. What is the standard time per unit? A) 0.42 minutes B) 16.0 minutes C) 17.4 minutes D) 20.0 minutes E) 21.7 minutes

Q: Isaac is looking for a business angel. His best chance of finding one is through: a. contact with business associates, accountants and lawyers. b. his banker. c. advertisements in magazines. d. contact with friends and relatives.

Q: Sample observations of a claims processor made over a 160-hour work month reveal that the worker produced a total of 384 completed claims forms. The performance rating was 80%. The worker was idle 20% of the time (so that idle time should be subtracted from the total time when computing the average observed time). The allowance factor is 8%. What is the normal time per unit? A) 0.42 minutes B) 16.0 minutes C) 17.4 minutes D) 20.0 minutes E) 21.7 minutes

Q: Small Business Administration loans include guaranty loans and loans directly from the SBA. a. True b. False

Q: A work sampling study requires an acceptable error level of 10 percent and z = 2 for 95.45 percent confidence. The adequate sample size is ________ if the sample proportion is thought to be as large as 50 percent, but ________ if the sample proportion is thought to be about 20 percent. A) 50; 20 B) 100; 64 C) 100; 16 D) 20; 50 E) 200; 80

Q: Harlans customers have been a little slow in paying their invoices, and he is short on cash to pay his quarterly taxes. Harlan should consider: a. sending the late payers to a collection agency. b. factoring. c. putting his late payers on credit hold until they pay up. d. taking out a personal loan to pay the taxes.

Q: Which of these is the most common predetermined time standard? A) CSD B) TMU C) RCH D) SAE E) MTM

Q: A firm with potential for large profits, as opposed to high growth potential, has many more possible sources of financing than does a firm that offers only unattractive returns. a. True b. False

Q: The accuracy of a labor standard is to be within 5%, and the confidence level is 95%. The standard deviation of the sample is 2 and the mean is 8. What sample size should be used? A) 8 B) 10 C) 96 D) 127 E) 68

Q: Carla is a loan analyst at the bank. When Cameron applied for a loan, Carla looked at his balance sheet for ________ assets to evaluate a possible loan for his companys financing. a. direct and indirect b. tangible and intangible c. those founded upon past performance and those depending on future performance d. industry-specific and firm-specific

Q: The data below represent time study observations for an assembly operation. Assume a 7% allowance factor. What is the normal time for element 3? Observations (times in minutes) Element Performance Rating 1 2 3 4 5 1 100% 1.5 1.6 1.4 1.5 1.5 2 90% 2.3 2.2 2.1 2.2 2.4 3 115% 1.7 1.9 1.9 1.4 1.6 4 100% 3.5 3.6 3.6 3.6 3.2 A) 1.7 min. B) 1.96 min. C) 2.11 min. D) 10.1 min. E) 11.2 min.

Q: For entrepreneurial ventures with the potential for becoming significant businesses, initial public offerings have been the fastest-growing source of financing over the past two decades. a. True b. False

Q: The average observed time for a given job is 10 minutes. The performance rating is 80%, and allowances are set by contract at 10%. What is the standard time? A) 8.80 minutes B) 8.88 minutes C) 10.00 minutes D) 19.00 minutes E) 19.80 minutes

Q: Business angels, as opposed to venture capitalists, provide a. asset-based loans. b. factoring. c. informal venture capital. d. trade credit.

Q: In time studies, personal time allowances are often established in which of the following ranges? A) 0 - 2% B) 3 - 5% C) 4 - 7% D) 6 - 10% E) 10 -15%

Q: A chattel mortgage is a loan for which real property, such as land or a building, serves as collateral. a. True b. False

Q: The smaller the percentage established for allowances: A) the closer is normal time to standard time. B) the closer is average observed time to normal time. C) the larger is the performance rating factor. D) the larger is the required sample size. E) the larger is the number of observations in the work sampling.

Q: In time studies, normal time is: A) average observed time multiplied by a performance rating factor. B) larger than standard time. C) determined by historical experience. D) converted to standard time by the performance rating factor. E) one hour later during the summer months.

Q: Lymans business has grown to 400 employees with annual revenues of $15 million. He would like to expand further but needs another $5 million. He should consider: a. a 7(a) guaranty loan. b. a CDC 504 loan. c. the SBIR program. d. an SBIC loan.

Q: A manager who is conducting a time study now needs an accuracy of 0.1 minutes, rather than 0.2 minutes as in the past. Because of this change in accuracy, the new required sample size becomes: A) one-fourth as large. B) one-half as large. C) twice as large. D) four times as large. E) one-tenth larger.

Q: Private placement is the selling of stock to select venture capitalists. a. True b. False

Q: Timing a sample of a worker's performance and using it as a basis for setting a standard time describes which of the following? A) predetermined time standards B) time studies C) work sampling D) methods time measurement E) left-hand, right-hand charting

Q: Novelty Shirts is a manufacturing company needing to expand its production facilities. Which SBA program would be best to acquire real estate valued at $150,000? a. 7(a) Loan Guaranty b. Certified Development Company 504 Loan c. 7(m) Microloan d. Small Business Innovative Research

Q: Which of the following techniques may NOT provide reliable and accurate labor standards? A) historical experience B) methods time measurement (MTM) C) time studies D) work sampling E) predetermined time standards

Q: Business loans are the primary source of financing for startups. a. True b. False

Q: Which of the following is NOT a use of labor standards? A) labor content of items produced B) cost and time estimates prior to production C) crew size and work balance D) basis of wage-incentive plans E) All of the above are uses of labor standards.

Q: Florence wants to obtain a loan for a large color laser printer for her copy shop. Since the printer will last approximately 8 years, the ideal loan would be a _____ loan. a. mortgage b. trade credit c. asset-based d. term

Q: The age of a company has little impact on the types of financing available to it. a. True b. False

Q: A worker completed a task 10 times during a period in which a typical trained employee completes the task 8 times. What is the worker's performance rating? A) 125% B) 150% C) 100% D) 112.5% E) cannot be determined with the given information

Q: Andrew is a venture capitalist who would like to find a good new business in which to invest. Hes done this before so he has learned to limit his investing to firms with potentially high returns in a _____ period. a. 6-12 month b. 1-2 year c. 3-5 year d. 5-10 year

Q: Suppose that the allowance factor for a job is 0.5 and the normal time is 5 hours. What is the standard time? A) 5 hours B) 2.5 hours C) 10 hours D) 7.5 hours E) cannot determine with the given information

Q: Normal time for a stopwatch study is equal to which of the following? A) Average observed time Performance rating factor B) Average observed time + Performance rating factor C) Average observed time / Performance rating factor D) Average observed time - Performance rating factor E) Performance rating factor / Average observed time

Q: A company that has over 100 employees with locations in several states is typically the type of company in which business angels make an investment. a. True b. False

Q: The type of financing Evangeline received from a business angel is known as: a. formal venture capital. b. informal venture capital. c. a formal business loan. d. an informal investment.

Q: Which of the following is not a method used to set labor standards? A) historical experience B) time studies C) predetermined time standards D) work sampling E) government laws and regulations

Q: Labor standards were pioneered by Frank and Lillian Gilbreth and: A) Frederick Taylor. B) Eli Whitney. C) Henry Ford. D) Alan Smith. E) GE.

Q: Around 5 percent of the business plans reviewed by venture capitalists are funded. a. True b. False

Q: Labor standards can help to determine which of the following? A) labor content of a product B) staffing needs C) incentive plans D) efficiency E) all of the above

Q: In groups of business angels, a. all angels must agree to invest or the deal is off. b. a majority of angels favoring investment obligates all angels to the deal. c. individual angels make personal decisions about whether or not to invest. d. no angel can invest unless all angels invest.

Q: Use of debt financing increases potential returns when a company is performing well, but it also increases the possibility of lower--even negative--returns if the company does not attain its goals in a given year. a. True b. False

Q: Its been Georges baby from the beginning and he really doesnt want to be accountable to any outsider for the decisions he makes in his business. In Georges case, he should seek initially to secure _____ financing. a. debt b. equity c. internal d. asset

Q: Labor standards are defined as the: A) preset activities required to perform a job. B) amount of space required by a specific crew to perform the job. C) standard set of procedures to perform the job. D) standard labor agreements. E) amount of time required to perform a job or part of a job.

Q: Both wholesalers and equipment manufacturers/suppliers can be used as sources of funds. a. True b. False

Q: Suppose that the allowance factor for a job is 0.10, and the normal time is 5 hours. What is the standard time? A) 5.6 hours B) 50.0 hours C) 4.9 hours D) 5.1 hours E) 4.5 hours

Q: Normal time equals the average observed time multiplied by the allowance factor.

Q: David is trying to decide whether to add capital through investing more of his own money or through borrowing money from the bank. To help him decide, you remind him that ss long as his firms rate of return on its assets is greater than the cost of the debt, his rate of return on equity will _____ as the firm uses more debt. a. decrease b. increase c. remain the same d. fluctuate

Q: Work sampling estimates the percent of time that a worker spends on various tasks.

Q: An advantage of work sampling is that it completely breaks down work elements.

Q: Williams Alternative Power, Inc., a company developing solar panels, has done considerable research and limited production during its two year life. It is about ready for its IPO. At this stage of its life cycle, its ability to attract venture capital is: a. greater. b. lessened. c. optimal. d. limited.

Q: Most unions do not accept the use of predetermined time standards.

Q: Small firms frequently run into problems when: a. they offer equipment as collateral for a term loan. b. they under-utilized the equipment purchased with the loan. c. they overestimate the cash inflows from the equipment purchased with the loan. d. they faiil to match a term loans payment terms with the expected cash inflows from the equipment purchased with the loan.

Q: An advantage of predetermined time standards is that the standard can be set before a task is actually performed.

Q: Ralph owns a lumber yard and has a $500,000 purchase order from a construction company. His cost of goods sold for this order is $300,000 Because his company needs working capital, the most logical loan for the lumberyard would be to use ________. a. an equipment-based loan. b. factoring. c. purchase order financing. d. asset-based financing.

Q: A therblig is a very small amount of time: one hundred-thousandth of an hour.

Q: Work sampling and time studies are similar in that the analyst in both cases records the time taken by the worker to accomplish each step of the task.

Q: Miracle Fund LLC is a venture capitalist. In exchange for providing venture capital, Miracle Fund: a. expects the entrepreneur to pay interest to the Fund. b. receives the right to own a percentage of the entrepreneurs business. c. takes a percentage of the annual earnings. d. becomes a general partner of the entrepreneur.

Q: If a manager conducting a time study needed an accuracy of 0.1 minutes, rather than 0.2 minutes, the adequate sample size would have to be twice as large.

Q: If Joan is applying for a loan for a shelving system to improve her retail sales where the system will serve as collateral, what type of loan would be the most appropriate? a. chattel mortgage b. line of credit c. real estate mortgage d. term loan

Q: Fans set up a crowdfunding account to produce new, not-for-profit episodes of Star Trek. This type of crowdfunding uses the ___________ approach. a. donations b. rewards c. pre-purchases d. equity investing

Q: Even though Evans company is a corporation, the bank imposed a loan covenant that required Evan to: a. make a balloon payment after three years. b. pay a loan origination fee. c. make quarterly rather than monthly payments. d. personally guarantee the loan.

Q: The allowances that convert normal time to standard time have three components: personal time allowances, delay allowances, and fatigue allowances.

Q: Andrea is working on forecasting her financial statements for her consulting business. Discuss three suggestions for Andrea to make her forecasting more effective.