Business Development

Q: What would happen when a small business that is growing becomes too great to be handled alone by an individual owner? A. There are fewer risks for a decline. B. The business will in most cases be cannibalized. C. Professional managers are hired to share the management load. D. The manager of the company will never join a competing business.

Q: Which of the following would avoid intrafamily strife when the family business is passed down to the next generation? A. Providing each member of the family business with the opportunity to obtain education and experience within the business. B. Allowing each family member who does wish to enter the business to find out and do those functions and activities that he or she does best. C. Being certain that all family members know and accept that they must join the business to continue the family business. D. Always assume that the leadership of the business must come from within the family.

Q: Which of the following statements about family businesses succession is true? A. Turning over management authority is not easy for most founders. B. Fewer than 10 percent of family-owned businesses are successfully transferred to a second generation. C. It is easy for the heir of the founder to assume authority. D. Fewer than 5 percent family-owned businesses succeed long enough to be inherited by the third.

Q: Which of the following is a disadvantage of buying a franchise? A. It is more expensive than starting a new business. B. You give up control of marketing and operations. C. You compete with the franchise company itself. D. You receive no training and management support.

Q: In many franchises the franchiser oversees (or even manages) the selection of location, the construction of facilities, the acquisition and installation of necessary equipment, and the initial inventory with which to open business. Which of the following terms best represents this type of franchising? A. Cannibalization B. Turnkey C. Liquidation D. Consignment

Q: A McDonald's franchise includes the right to use McDonald's many trade names, specifications of the product to be sold, operating methods, marketing plan, and national advertising. Franchisees pay to the franchisor both an up-front fee to obtain the franchise rights and a percentage of gross sales. Which of the following types of franchising does this situation illustrate? A. Conversion franchising B. Trade name franchising C. Business format franchising D. Product distribution franchising

Q: _____ provides an organization through which independent businesses may combine resources. A. Product distribution franchising B. Trade name franchising C. Conversion franchising D. Business format franchising

Q: Which of the following holds true for product distribution franchising? A. It provides the franchisee with specific brand named products, which are resold by the franchisee in a specified territory. B. It provides an organization through which independent businesses may combine resources. C. It is an agreement that provides only the rights to use the franchisor's trade name and/or trademarks. D. It is an agreement that provides a complete business format.

Q: Which of the following is an agreement that provides only the rights to use the franchisor's trade name and/or trademarks? A. Product distribution franchising B. Trade name franchising C. Conversion franchising D. Business format franchising

Q: The value of a franchise is determined by: A. the rights granted. B. the conditions and standards set. C. the operating permissions granted. D. the value of assets acquired.

Q: In a _____, the buyer seizes control of the business without the permission of all owners. A. takeover B. joint venture C. spin-off D. merger

Q: Which of the following is one important advantage of key resource allocation? A. It has a financial plan for the future, based on a single level of operations; a quantitative expression of the use of resources necessary to achieve a business's strategic goals. B. As only assets are acquired, a subsequent business, regardless of its legal form, is not responsible for any of the acts or transactions made prior to purchasing the business. C. It has an agreement between two or more entities to pool resources in order to complete a project. D. It specifies the time that is required for a business to acquire resources, convert them into product, sell the product, and receive cash from the sale.

Q: _____ are the only way a sole proprietorship may be purchased. A. Buy-ins B. Takeovers C. Key resource acquisitions D. Buyouts

Q: The primary advantage to a buyout is its: A. hands-off approach. B. significantly less cost. C. simplicity. D. employee stock option plan.

Q: Seizing of control of a business by purchasing its stock to be able to select the board of directors refers to a(n): A. buy-in. B. takeover. C. merger. D. earn-out.

Q: The purchase of substantially less than 100 percent of a business is called a(n): A. takeover. B. buy-in. C. spin-off. D. earn-out.

Q: The price at which a buyer is indifferent about buying or not buying the business is called: A. the balance point. B. the point of indifference. C. caveat emptor. D. the reversing point.

Q: Which of the following refers to income capitalization? A. Regular and systematic reduction in income that transfers asset value to expense over time. B. Dividing projected net income excluding depreciation, interest, and owner draws, by the best return that you could expect to obtain in other investments. C. Multiplying your estimate of future earnings by the net income to equity ratio. D. The amount of profit earned by a business before calculating the amount of income tax owed.

Q: _____ are rules of thumb that are commonly used to estimate firm value in relation to some easily observable characteristic of the business. A. Synergies B. Spin-offs C. Codicils D. Heuristics

Q: The ratio of the value of a firm to its annual earnings is called: A. unappropriated profit. B. accumulated earning. C. retained earning. D. the earnings multiple.

Q: Which of the following is commonly used to estimate the value of a business? A. Synergy B. Comparable sales of other firms C. Spin-offs D. Industry heuristics

Q: _____ is an estimate of what an identical asset would cost to be acquired and readied for service. A. Earnings multiple B. Book value C. Replacement value D. Net realizable value

Q: The amount for which an asset would sell, less the costs of selling the asset is called: A. book value. B. replacement value. C. net realizable value. D. earnings multiple.

Q: The difference between original acquisition cost and the amount of accumulated depreciation is called the: A. replacement value. B. book value. C. earnings multiple. D. discounted cash flow.

Q: _____ analysis is based on the concept that the longer you have to wait to receive money, the less valuable it is right now. A. Discounted cash flow B. Replacement value cash flow C. Free cash flow D. Book value cash flow

Q: _____ are the cash flows that have been reduced in value because they are to be received in the future. A. Book value cash flows B. Replacement value cash flows C. Free cash flows D. Discounted cash flows

Q: Patents and trade secrets are examples of: A. employee stock option plans. B. heuristics. C. franchising. D. intangibles.

Q: Which of the following is a financial statement that will be checked during due diligence when buying an existing business? A. White paper B. Balance sheet C. Codicil D. Amicus brief

Q: Which of the following is the primary goal for performing due diligence? A. Finding any inefficiencies, unnoticed opportunities, waste, and mismanagement B. Conducting extensive interviews with the sellers of the business C. Identifying the potential competitors of the company D. Studying the competitive strategies of the company

Q: Which of the following terms means "let the buyer beware"? A. Caveat lector B. Spin-off C. Caveat emptor D. Synergy

Q: Which of the following is the last step for performing due diligence? A. Obtain sufficient capital to purchase and operate the business. B. Conduct extensive interviews with the sellers of the business. C. Interview customers and suppliers of the business. D. Study the financial reports and other records of the business.

Q: Which of the following is the first step for performing due diligence? A. Study the financial reports and other records of the business. B. Conduct extensive interviews with the sellers of the business. C. Obtain sufficient capital to purchase and operate the business. D. Make a personal examination of the site (or sites) of the business.

Q: The process of investigating a business to determine its value is called: A. synergy. B. spin-off. C. heuristics. D. due diligence.

Q: Which of the following is an excellent way to find businesses for sale? A. Statistical surveys B. Local community center C. Networking D. Universities

Q: Which of the following is a disadvantage of purchasing an existing business? A. Need for sufficient demand for the products and services to operate profitably. B. Purchasing a business being significantly more expensive than a start-up. C. Need to hire many new employees when buying an existing business. D. Existing managers and employees resisting change.

Q: If Sarah were to buy an existing business, which of the following disadvantages would you point out? A. Difficulty in determining the worth of the business. B. Possibility of established customers leaving due to change. C. Need for establish production processes. D. Buying a business being more expensive than starting one.

Q: Sam used his management skills to start a loans advising website. He started seeing clients at his home before it grew into a well-established company in the next ten years. Which of the following entrepreneurial methods did he use in the beginning, to reduce the financial risk of his start-up? A. Franchise B. Consignment C. Lean method D. Liquidation

Q: Which of the following is essential to the success of all start-ups when one uses the "lean" entrepreneurial methods? A. Having experience managing large firms B. Not encouraging standardizing repetitive characteristics of a business C. Starting a business with a sole founder D. Keeping in touch with one's customers

Q: Which of the following is essential to the success of all start-ups? A. Starting a business with low margins B. Not going into competition with one's employer C. Building trust in one's "story" D. Not starting a business with one's established customers

Q: A business that is created by separating parts of an operating business into a separate entity is called a: A. synergy. B. franchise. C. spin-off. D. turnkey project.

Q: Which of the following is most likely to be achieved as the result of starting a business with established customers? A. Prices set at the highest level the market will bear B. Investment in multiple investments of differing risk profiles C. Access to revolving credit D. Immediate cash flows

Q: Which of the following is a way to start business with established customers? A. Synergizing B. Effectuation C. Spin-off D. Earn-out

Q: The amount by which sales prices exceed product costs refers to: A. high margins. B. synergy. C. spin-off. D. asset.

Q: The single greatest hurdle to a successful start-up is obtaining and maintaining sufficient cash to support both operations and growth. Which of the following is needed by a successful start-up to overcome this hurdle? A. Reserve price B. High margins C. Spin-off D. Liquidation

Q: Which of the following provides a buffer for the mistakes made by a start-up business? A. Liquidation B. High margins C. Effectuation D. Mindshare

Q: Which of the following is most likely to increase the odds of successes for a start-up? A. Starting a business with a sole founder B. Having experience managing large firms C. Choosing a business that produces high margins D. Securing investment from family or friends

1 2 3 … 923 Next »

Subjects