Small Business Management (End of Year) - Flashcards

Q: Accounts receivable

When Darla prepares her company\'s balance sheet, she should include ___________ in the list of current assets.

Q: Operating income

To calculate his company\'s _______________, Edgar will subtract operating expenses from gross profits.

Q: Balance sheet

For investment purposes, Wilma needs a snapshot of the firm\'s financial position at a specific point in time. She should look at the

Q: A fixed asset

Eugenia\'s company bought a delivery truck to deliver merchandise to customers. This truck should appear as ___________ on the balance sheet.

Q: True

The cash flow statement answers the questions \"From where did the cash come?\' and \"Where did the cash go?\" True False

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Accounts receivable

answer

When Darla prepares her company's balance sheet, she should include ___________ in the list of current assets.

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January 1, 2012

answer

For Webster to understand how his company performed during calendar year 2012, he must begin with firm's financial position on:

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Operating income

answer

To calculate his company's _______________, Edgar will subtract operating expenses from gross profits.

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Which numbers are the most important for him to watch and to watch them like a hawk

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Ignazio has just opened his business. One of the first things he should learn is:

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Balance sheet

answer

For investment purposes, Wilma needs a snapshot of the firm's financial position at a specific point in time. She should look at the

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Income statement, balance sheet

answer

For any business, both the _______ and ________ are needed to determine a firm's financial position.

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$360,000

answer

A two year-old asset has a depreciable life of 10 years. Its initial purchase cost was $450,000 and it is depreciated by 10 percent annually. What is the remaining depreciable value of the asset?

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A fixed asset

answer

Eugenia's company bought a delivery truck to deliver merchandise to customers. This truck should appear as ___________ on the balance sheet.

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Complement each other

answer

The balance sheet and income statement are separate reports, but actually...

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True

answer

The cash flow statement answers the questions "From where did the cash come?' and "Where did the cash go?" True False

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Land

answer

Astoria is using a software application to prepare the balance sheet. She wasn't sure which of the following should be included in the fixed asset category. What would you tell her?

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Owner's equity

answer

Martina invested her savings into her business when she started it. Later she added more capital and she has kept some of her profits. Together these are known as:

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Return on assets

answer

Jasper bought some new equipment for his business. Six months later he wants to know whether this was a good idea. To do that, he can calculate the:

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Accrual; cash

answer

Coronado cannot use the income statement as a measure of cash flows because it is calculated on a(n) _______ rather than a(n) _______ basis.

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Often measured by a ratio of current assets to current liabilities

answer

The liquidity of a firm is...

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A cash basis

answer

The cash flow statement measures cash flows on...

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False

answer

Depreciation is the cost of a firm's land and building allocated over its useful life. True False

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Cash flow statement

answer

Lucille is preparing the _____, which shows all cash receipts and payments involved in operating the business and managing its financial activities.

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True

answer

A profitable company may not have positive cash flows. True False

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Current asset

answer

If an asset can quickly be converted to cash, it is considered to be a(n):

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True

answer

Liquidity represents the degree to which a firm can meet maturing short-term debt obligations with available working capital. True False

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False

answer

The income statement shows a firm's financial position on a specific date. True False

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Marketing-related expenses

answer

Marvin is preparing one of the annual financial statements and has asked you which of the following should be included in operating expenses. You tell him it is:

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Short-term note

answer

Ignatio applied for a loan for his business that he will repay in 9 months. The best way to describe this loan is as a(n):

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False

answer

Ownership equity represents the owner's investment in the company, which can be either his/her cash invested in the company or money borrowed from a bank to purchase fixed assets. True False

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False

answer

In order to determine the cash flows from day-to-day operations, the firm must convert the company's income statement from a cash basis to an accrual basis. True False

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Increases; increases

answer

If Hector's firm's current ratio _____, its liquidity _____.

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Operating

answer

Depreciation is added back on the cash flow statement in which activity section?

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False

answer

The terms earnings, profits and income refer to different amounts on the income statement. True False

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If the interest rate on the loan is less than the return on assets for the dozer, buy

answer

Lance is trying to decide whether to purchase a new bulldozer to expand his business. He is confident he has enough work to keep the bulldozer busy and that repaying the loan will not be a problem. What advice would you give Lance?

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Balance sheet

answer

For investment purposes, Wilma needs a snapshot of the firm's financial position at a specific point in time. She should look at the...

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Percentages

answer

The items on the income statement are expressed in dollars but the corresponding margins are expressed as:

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Inventory

answer

Cameron and Ashley bought $40 of "premium pink lemonade mix" and paper cups for their lemonade stand. These items are considered:

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True

answer

The major difference between cash-basis accounting and accrual-basis accounting is when the firm recognizes revenue and profits. True False

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False

answer

Accounts payable consist of payments due from a firm's customers. True False

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Subtract cost of goods sold from sales

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To determine her company's gross profits, Edith should:

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Assets

answer

To determine his company's debt ratio, Hector should divide the firm's total debt by the total _____.

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True

answer

A conventional measure of a firm's liquidity is a comparison of current assets to current liabilities. True False

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False

answer

Net income is used to measure the return on the firm's total assets. True False

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False

answer

Profits reward owners for investing in a company, but they do little to promote future growth. True False

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Debt and equity

answer

Kevin wants to open his own car repair shop. To do that he will need tools and other equipment. The two methods Kevin can use to pay for these items are:

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Subtract the increase in inventory from the increase in accounts payable

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Guenther bought merchandise for his retail business on credit and sold some of it for cash. To record his purchases on his cash flow statement, Guenther will:

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Accounts Payable

answer

Stephanie ordered merchandise from one of her vendors but she doesn't have to pay for it right away. The amount of this purchase will increase Stephanie's:

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Collateral

answer

Raul needed an expensive piece of equipment to expand his business. He borrowed the money from the bank and pledged the equipment as ___________. If Raul does not repay the loan, the bank can take his equipment.

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Cash from operations, buying or selling assets, and financing the business.

answer

The cash flow activities on the cash flow statement are divided into these categories:

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Point of recognition of revenue and expenses is different.

answer

Natalya is confused about the difference between cash-basis and accrual-basis accounting. So you tell her that the:

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False

answer

The three activities that explain the cash inflows and outflows of a business are the selling, investment and financing activities. True False

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Current liabilities have decreased

answer

Comparing this year's results to last year's, Hector discovered that his firm's current ratio improved from 1.5 to 2.0. What has happened?

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False

answer

Total assets less outstanding debt equals ownership equity. True False

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False

answer

Jan's bank has asked her to show them how her firm's financial position has changed in the past year. She should provide the company's balance sheet. True False

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False

answer

Qualified small businesses that cannot obtain business loans through normal lending channels can get loans directly from the SBA through its 7(a) Loan Guaranty Program. True False

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intend to cash out after five to seven years

answer

Many venture capitalists:

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a community-based financial institution

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Barry needs financing to start his inner-city venture. His goal is to provide part-time employment for at-risk youths to keep them off the streets and engaged in learning marketable skills. Barry may find some assistance from:

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Maximum

answer

A line of credit is the _____ amount of credit a bank will provide a borrower at any one time.

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False

answer

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

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False

answer

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. True False

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False

answer

A source of early-stage capital financing for a company is financing from commercial banks. True False

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are often limited partnerships that raise capital from other investors.

answer

Venture capital companies

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True

answer

Companies that have business dealings with a new firm are possible sources of funds for financing inventory and equipment. True False

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informal venture capital

answer

Business angels, as opposed to venture capitalists, provide:

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debt must be repaid even if the company does not make a profit.

answer

Glenda is trying to decide between the use of debt and the use of equity to finance her young business. She should remember that:

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False

answer

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. True False

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the loss of voting control of the company.

answer

Maguire was considering selling stock as a source of funds but was concerned about:

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True

answer

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. True False

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7(a) Loan Guaranty Program

answer

Sandy 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 85 percent of the loan. She also had to submit a loan application to the lender. Ellie is participating in the:

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Family members

answer

Althouth not the primary source of financing for most small business startups, another source of early financing is:

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Intangible

answer

Williams Alternative Power, Inc. a company developing solar panels, is applying for a loan. The research the company has done for the manufacturing process would be a(n) _____ asset for the loan evaluation.

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False

answer

The amount of trade credit available to a new company is dependent on the supplier's confidence in the firm and not the type of business. True False

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False

answer

Qualified small businesses that cannot obtain business loans through normal lending channels can get loans directly from the SBA through its 7(a) Loan Guaranty Program True False

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False

answer

Assets such as the quality of a firm's employees are considered tangible in nature and thus have substantial value as collateral. True False

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Certified Development Company 504 Loan

answer

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?

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personal credit cards

answer

In the beginning, some entrepreneurs use ____________ as a source of financing.

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a bank close to her store.

answer

Joann is buying an existing convenience store. When she considers which bank to use, her best choice would be:

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they fail to match a term loan's payment terms with the expected cash inflows from the equipment purchased with the loan.

answer

Small firms frequently run into problems when:

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the absolute dollar amount of income.

answer

To determine how well her business is doing, Darlene should monitor the return on her investment (equity) because it is a better measure of performance than

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False

answer

Small Business Administration loans include guaranty loans and loans directly from the SBA. True False

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how he will be able to repay the principal of the loan.

answer

In his presentation to his banker when he applies for a business loan to purchase additional equipment, Alan should emphasize:

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False

answer

Commercial investors are sometimes called business angels. True False

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True

answer

If a firm finances with equity rather than with debt, it will bear no interest expense and thus yield greater net income. True False

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True

answer

When a stock sale is restricted to private placement, an entrepreneur can avoid many of the demanding requirements of the securities laws. True False

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15

answer

Floyd's income statement showed for the current year his company had an operating income of $30,000 and his balance sheet showed total assets of $200,000. His return on assets is _________ percent.

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False

answer

The main advantage of using credit cards for financing is the relatively low interest rate compared to bank loans. True False

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True

answer

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 True False

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False

answer

The private sale of a firm's common stock is regulated by the Securities and Exchange Commission. True False

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True

answer

In most cases of IPOs, the equity capital raised is used for growth as opposed to an immediate exit strategy of the original entrepreneur. True False

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True

answer

The boost to employee motivation and effort that results from an ESOP will vary significantly from firm to firm. True False

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lead to lower employee morale.

answer

Uncertainties accompanying an impending sale of a business often

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True

answer

Entrepreneurs should think very carefully about their motives for exiting a business and what they plan to do after the harvest. True False

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False

answer

The opportunity to exit a business is triggered by an interested seller. True False

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rate of return that she could earn on a similar investment.

answer

Eleanor has money to invest and is considering buying a company. When comparing her alternatives, her opportunity cost on a any investment is the:

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Retaining control

answer

Paul is approaching retirement and has decided to siphon off funds form his company rather than sell it. From his perspective, the advantage of systematically withdrawing cash from the firm is:

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True

answer

More recently, the bust-up leveraged buyout was replaced with the build-up leveraged buyout. True False

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poor performance

answer

The effects of the harvesting process include

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Buy the firm's assets.

answer

Jill is purchasing a web design company that has patented a new form of technology. Which purchase would be best for her in relation to the web design company's liabilities?

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True

answer

The harvesting process encompasses more than just selling and leaving a business. True False

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What is the value of her firm?

answer

Valerie is beginning to think of harvesting her company. Which question should be asked first?

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False

answer

One of the drawbacks of harvesting by withdrawing cash flows slowly is that the owner must seek out a buyer for the eventual sale of the business. True False

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culture conflict

answer

Evangeline has sold her small boutique to a large retail chain but has agreed to stay on and manage the store. Evangeline should expect:

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Negotiation skills play an important part in valuation.

answer

Which statement best characterizes business valuation?

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cash, stock

answer

Vasily is selling his business. As a harvesting owner we would expect him to prefer _____ over _____.

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False

answer

Harvesting is the method entrepreneurs and investors use to grow their firms. True False

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False

answer

The build-up leveraged buyout is typically used in industries that are dominated by large firms. True False

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Offer to finance the remaining 20%, accepting payments over the next few years.

answer

Steve wants to sell his business but the bank will not lend the buyer enough money. Between personal savings and the bank loan, the buyer has about 80% of the asking price. Which of the following options would be best for Steve in this situation?

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A strategy to release the firm's free cash flows to the owners

answer

Matt owns a car dealership that is very profitable. Since he plans to retire in 5-10 years, Matt has decided to retain ownership for now, but without continuing to grow the business. This change would also allow him to invest for retirement some of the cash that the business is now generating. Which harvesting method does this example illustrate?

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True

answer

For the entrepreneur who is simply tired of the day-to-day operations of the business, slowly withdrawing cash flows over time may require too much patience. True False

question

Get advice from someone who has sold a business.

answer

Arthur's company is doing well but he has grown a bit tired of the daily grind. The idea of selling is appealing to him. What would you recommend Arthur do next?

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exiting a business.

answer

Millard has worked for the past five years to build his business but as retirement nears, he is thinking it is time for the harvest. Harvesting refers to

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bust-up

answer

In earlier years, leveraged buyouts became synonymous with the ____ LBO.

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create a liquid currency to fund future acquisitions.

answer

Going public can be beneficial to a firm by helping it

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LBO

answer

Marvin is planning to sell his company to his management team. Marvin will be financing part of the purchase. This type of arrangement is a form of:

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True

answer

Lack of in-house expertise is a major justification for using outside CRM services. True False

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personal information

answer

Information taken from warranty cards would be stored in which category of a customer profile?

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False

answer

Initial CRM support efforts should be placed with the website as those personnel have the most customer contact. True False

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False

answer

Consumer needs can be completely satisfied by proper customer relationship management. True False

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perceptual categorization.

answer

The reason that a group of uniformed people walking down the street playing musical instruments is recognized as a band is the result of

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False

answer

The ability to enjoy one-on-one contact with customers has always been a competitive advantage for large firms. True False

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privately complain to the business

answer

Which consumer option for dealing with product or service dissatisfaction is the only one that is desirable to a business?

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opinion leaders

answer

Nikita's decision to buy her shoes at the same shop that her boss patronizes is the result of which sociological influence?

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False

answer

It is important to keep in touch with a customer and make a sales pitch each time. True False

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True

answer

There must be a company-wide commitment to CRM concept if CRM is to be productive. True False

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customer complaints

answer

Most customer service problems are identified by

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value equation

answer

Molly has had repeated positive experiences with her local coffee shop. They suggest new flavors, call her by her first name, and donate to a local charity that Molly supports. Molly's experiences, as a result, contribute to the firm's CRM _______.

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are often implemented into sales departments first since this area of a company typically generates the greatest amount of customer contact.

answer

CRM software programs

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nationally known

answer

In general, a person can be an opinion leader even if he or she is not

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False

answer

A consumer's recognition of a problem can be characterized as routine if the problem evolves over time. True False

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customer service quotient

answer

To establish an effective customer service program, what should be completed first?

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False

answer

Only three classes of needs—social, psychological, and spiritual— can be connected to behavior through motivations. True False

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False

answer

Addressing a customer by name typically means very little to them. True False

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determining if existing customers are satisfied with past floral arrangements.

answer

As an owner of a floral design business, Tim's highest priority for the florist's CRM program should be

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The Golden Rule

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CRM is the business version of

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Small increases in customer retention can translate into large increases in profits.

answer

Economic benefits associated with maintaining relationships with current customers include:

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culture

answer

Julie's preference for the a certain style of barbeque developed in her state is the result of which sociological influence?

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an attitude

answer

An enduring opinion that is based on a combination of knowledge, feeling, and behavioral tendency is referred to as

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True

answer

An evoked set is a group of brands that a consumer is both aware of and willing to consider as a solution to a purchase problem. True False

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Spiritual

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Attending a prayer breakfast is most likely an attempt to satisfy which category of need?

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small firms possess great potential for providing superior customer service.

answer

A basic idea forming the foundation of customer loyalty for small firms includes the notion that

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is not included in Bob's evoked set.

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Bob never purchases bottled water when he is thirsty even if it is available. This behavior indicates that bottled water

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attitude

answer

June has always believed that the resale furniture store doesn't have quality furniture as it has been used by others. This _____ may cause her to avoid the store and shop at a store specializing in new furniture across town.

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True

answer

Customer relationship management means different things to different businesses. True False

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is an online forum where unhappy customers can post a negative review.

answer

Yelp.com

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opinion leaders

answer

A winery promotes its products by holding wine tastings at the restaurants of outstanding local chefs. The winery is utilizing which sociological influence?

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customer experience management

answer

An approach that recognizes that, with every interaction, customers learn something about a company that will affect their desire to do business there in the future is known as

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True

answer

Product testing is the last step in the product development process. True False

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a dual distribution channel.

answer

Cooking for Collin, a small manufacturer of holiday cakes, sells its product through independent retailers and mail-order marketing. Cooking for Collin is relying on

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brandmark

answer

Judy is opening a small business producing high-quality paper products and has decided to place a green pine tree on all product boxes and on the sign outside the facilities to symbolize the business. At this point, the symbol is an example of a

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False

answer

3PLs are considered more cost effective by many small businesses because it allows the company to focus on the primary operations and outsource the accounting challenges to another company. True False

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True

answer

A small firm's "special signature" is called a logo True False

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one to three years may pass before profits are realized.

answer

The business analysis stage of new product development is critical since

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False

answer

Physical distribution of products includes only transportation. True False

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brand

answer

iPad is a

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helps an entrepreneur visualize the sales and profits of a product from the time it is introduced until it is no longer on the market.

answer

The product life cycle, as opposed to the competitive advantage life cycle,

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False

answer

During the competitive advantage life cycle, firms can exploit a competitive advantage during the develop stage. True False

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True

answer

Trademarks and service marks are legal terms indicating the exclusive right to use a brand. True False

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False

answer

If inventory needs grow with higher sales, the increase in accounts receivables will cover this cost. True False

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as trade dress

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The distinctive operating image of a product, including features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques, can be protected

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a value-creating industry position that is likely to endure over time.

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A sustainable competitive advantage is

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that are relatively complex to repair.

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Beatrice is contemplating whether to offer a warranty on her product. She should remember that warranties are important for products:

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can be more challenging to manage.

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A product strategy that includes a new product that is quite different from existing products

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implement previously developed plans for the hidden curves.

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Before a company's competitive advantage moves into the decline stage, it should

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False

answer

Because they have limited resources, small business need not formalize the product development process. True False

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an investment

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Small businesses should view distribution costs as

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they provide more efficient means of distrubtion than the product producer

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ntermediaries exist because

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True

answer

A brand includes the verbal identification of a product as well as symbols or other means of identifying a product. True False

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False

answer

All small firms want to grow True False

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A down payment will be required.

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Hillary wants to purchase a refrigerator on credit. If she uses an installment plan, what is most likely to occur?

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False

answer

Markups may be expressed as a percentage of either the firm's cost or the industry-standard cost. True False

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Sears Card

answer

Which card is a retailer credit card?

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False

answer

A revolving charge account would be typical for larger purchases; smaller purchases are typical on installment accounts. True False

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False

answer

Trade credit is extended to consumers purchasing large volumes of products. True False

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False

answer

Price lining refers to the systematic determination of the right price for a product or service. True False

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open charge account

answer

When she uses her American Express card, Cathy obtains possession of goods or services when they are purchased. Payment is due when billed at a later date. American Express is a type of:

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selling price

answer

Markup pricing may be expressed in terms of a percentage of either the ____ or the cost.

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False

answer

Services are generally easier to price than products. True False

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trade-credit agency

answer

Information Express is a privately owned and operated organization that collects credit information on business firms. After the organization analyzes and evaluates the data, it makes credit ratings available to client companies for a fee. Information Express is a

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Capacity

answer

Which "C" defines the customer's asset conservation?

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False

answer

Break-even analysis is an accurate tool for pricing because it points directly to the correct price for a given product. True False

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True

answer

Credit bureaus maintain credit histories on individuals based on information reported to them by banks, mortgage companies, department stores, and other creditors. True False

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Installment accounts

answer

Which option is designed for long-term credit?

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True

answer

Under certain circumstances, local, state, and federal laws must be considered in setting prices in a small business. True False

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To make sales

answer

Zemann's, a large firm selling custodial supplies to other businesses, has decided to begin offering trade credit. Its major objective in granting credit is

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False

answer

The bad-debt ratio is the ratio of bad debts to total sales. True False

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variable pricing strategy

answer

Retro Hits, a local band covering songs from the 1980's and 1990's, decided they wanted to expand to more college students. Research showed students thought the current $15 ticket price was too high for a local band. To strengthen ticket demand, Retro Hits began offering $10 tickets to all fans who checked in on Facebook. The band was using a

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price

answer

The seller's measure of what he or she is willing to receive in exchange for transferring ownership or use of a product or service is

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$21

answer

The Golf Global Company sells 1,000 shirts annually at a price of $35 each. If the company's pricing policies adhere to a 40% markup of selling price, the cost of each shirt is

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follow-the-leader

answer

A business that has a gaming console intended to compete directly with Sony's Playstation gaming console would likely use a ____ pricing strategy.

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False

answer

Trade-credit agencies collect credit information on business firms and consumers in a given area. True False

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require creditors to specify how finance charges are computed

answer

A primary purpose of the federal Consumer Credit Protection Act is to

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True

answer

Because it is a standard practice for many business types, selling on credit cannot often be avoided. True False

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Credit bureaus

answer

Which type of organization is a good source of consumer credit information?

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False

answer

Because small businesses are small by definition, pricing and credit considerations are relatively unimportant to their overall performance. True False

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True

answer

Trade show groups claim that the cost of an exhibit is less than one-fourth the cost of a sales call True False

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percentage of sales

answer

Promotional funds are determined according to past experience in which of the following methods?

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trade show exhibits

answer

Hands-on experience with a product is possible with

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False

answer

Straight salaries are best for motivating salespeople because of the financial security salaries provide. True False

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specialities

answer

The key to effective ___________ is that they last.

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True

answer

Both wholesalers and retailers can utilize sales promotion tools to increase sales. True False

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Blog

answer

HubSpot, Inc. used a(n) ______ to establish the company's platform of inbound marketing.

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False

answer

A small business that is search engine-friendly will have lower ranks and therefore it will attract more visitors. True False

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spending as much as the competition

answer

Inspiring Toys, a small manufacturer of educational toys, is formulating a budget for next year's promotional activities. What method should be considered to react to a short run promotional tactic done by Mattel?

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A good publicity program requires regular contacts with the news media so Ned needs to make them aware of his support.

answer

Ned's company has supported the Little League, Pop Warner football, the high school band, and many other local charities but isn't getting the amount of press he feels his actions deserve. Why might this be true?

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True

answer

Specialty items are effective because they last, are generally delivered personally, and have value to the customer while they keep the name of the company or product in front of them. True False

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product, institutional

answer

The two basic types of advertising are ____, which makes potential customers aware of products and their need for them, and ____, which conveys an idea about the firm that produces the product.

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False

answer

Product advertising is intended to keep the public conscious of the company and its good reputation. True False

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Advertising

answer

A widely dispersed market favors which promotional method?

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False

answer

The way a business combines its communications is a promotional mix. True False

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$3,000 because it is within the range and also for specific results.

answer

Rebecca is starting a new consulting business for a small, local target market. She has determined the amount for the four methods: percentage of sales $2,000; how much to spare $1,000; competition spending $5,000; and specific results $3,000. How much should she spend?

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False

answer

A generous salary with a commission cap is typically best for most small businesses. True False

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False

answer

Personal selling is an effective method for promoting light bulbs. True False

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Advertising media

answer

Stephen is a new entrepreneur who would like to advertise his business but feels his creativity is insufficient to the task. Where can he find help?

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False

answer

Advertising can make a product successful in the long term. True False

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a calendar

answer

Marcia is considering offering a promotional item for her sales people to give to prospects at their first appointment. Which of the following would be the best choice?

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False

answer

Most small businesses create their own promotional messages. True False

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marketer-initiated contacts

answer

Telephone calls and mail surveys are examples of

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True

answer

Trade show groups claim that the cost of an exhibit is less than one-fourth the cost of a sales call. True False

question

publicity is important to a small business and should be used at every opportunity.

answer

Herbert is considering whether to advertise on the placemats used in many local restaurants. One of the arguments in favor of this action is:

question

communication

answer

At its core, successful promotion is all about effective _____.

question

True

answer

Advertising seeks to sell by informing, persuading, and reminding customers of the existence or superiority of a firm's product or service. True False

question

False

answer

Publicity is accurately described as free advertising. True False

question

slow downloading

answer

Martel visited the website of his favorite music store looking for a specific CD from years past. The website touted a vast library of classic rock CDs but after just a few minutes Martel gave up and left the site. It is probable the website suffered from:

question

False

answer

Inquiries by a potential customer that do not lead to a sale can still create what is known as a "promising prospect." True False

question

True

answer

Spending as much as the competition does for promotional efforts can lead the firm to copy the mistakes and successes of a rival. True False

question

click on the banner

answer

Payment for banner advertising is usually based on the number of people who actually

question

impersonal referrals

answer

A salesperson at Carpet Warehouse searches public records of new building permits to identify potential customers for new carpets. This salesperson is relying on ____ to identify sales prospects.

question

Trade show exhibits

answer

Anne owns a small business dealing with industrial products. She currently uses personal selling extensively, but she wants to reduce her cost without losing exposure. Which promotional tool should she use?

question

accessing foreign labor through contracts with independent providers.

answer

Nike and many other companies engage in international outsourcing, which refers to

question

False

answer

By informing consumers about the lifestyles of others, globalization is leading toward more diverse consumer preferences. True False

question

True

answer

Entrepreneurs decide to go global to expand their opportunities, but sometimes they are forced to enter foreign markets to compete with firms that have already done so. True False

question

the outcomes of learning effects and economies of scale.

answer

Experience curve efficiencies refers to

question

False

answer

Small businesses that are either already or interested in exporting or importing can receive information from the SBA through conferences, seminars, publications and counseling. True False

question

licensee

answer

Mattel has allowed a producer in Thailand to manufacture and sell its branded dolls in overseas markets. The company in Thailand is a:

question

False

answer

Twenty-five percent of the world's population lives in the United States. True False

question

insights gained by employees enhance their work performance.

answer

Learning effects occur when

question

False

answer

The U.S. Department of Industry provides information for entrepreneurs considering global operations. True False

question

True

answer

Exporting involves the sale of goods made in the home country to customers in another country. True False

question

leads

answer

The Federation of International Trade Associations website is a source of trade

question

Will Canadian sales hurt USA sales?

answer

A Canadian grocery store chain with its corporate headquarters in Quebec has approached Antonio, the owner of a company that produces pasta, about exporting its pasta into Canada. Which question would need to be answered in relation to the company's production capacity objectives?

question

cut costs and access talented foreign employees

answer

Some small firms choose to outsource internationally in order to

question

Is the company up to the task?

answer

Allen is considering entering the global marketplace. What question should be answered first?

question

False

answer

The motivation to take domestic products to foreign markets is more relevant today than in the past. True False

question

by spreading of an investment across more units of production.

answer

As Antonio's pasta company increases in size, the business is able to realize economies of scale:

question

has increased in value relative to the other currency.

answer

When the exchange rate for a currency rises relative to that of another country, the rising currency

question

True

answer

Perhaps the easiest way to break into international markets is to use a trade intermediary. True False

question

True

answer

The unique features of a local environment can yield benefits to small firms locating there even when the costs are greater. True False

question

find raw materials

answer

In the past, companies have left the United States to:

question

exporting

answer

In Antonio accepts the offer of the Canadian grocery to sell his American-made pasta in Canada, he will be:

question

False

answer

Trade leads are accessed most often through contacts. True False

question

False

answer

Once a small business owner decides to expand internationally, s/he should study the competitive forces in the foreign market. True False

question

False

answer

An economic risk for a global company is the threat of new labeling regulations. True False

question

stating contracts in US dollars as opposed to the international currency.

answer

A small company can deal with changing currency rates by

question

True

answer

When a firm reaches Stage 2, the entrepreneur engages extensively in both the coordination of the efforts of others as well as performing basic work activities. True False

question

True

answer

Entrepreneurs who follow a win-win negotiating strategy seek a solution that will satisfy at least the basic interests of both parties. True False

question

True

answer

It is critical for entrepreneurs to set aside time to work undisturbed. True False

question

Production

answer

In a line-and-staff organization, which division is a line activity?

question

pacesetting

answer

Linda's high standards and expectations of employee excellence is typical of ____ leaders.

question

Formal organization

answer

The use of written policies, budgets, and job descriptions is most closely associated with which stage of growth?

question

True

answer

A small business typically has greater constraints in cash flow and employee expertise than found in larger corporations. True False

question

student consulting team program

answer

The consulting resources of universities are made available to small business firms by

question

intermediate supervision.

answer

Margaret has launched a new event planning company with four employees. With the growth in sales and personnel, the next step of growth will involve

question

False

answer

The maximum number of employees who can be supervised effectively by a capable manager is four. True False

question

could be future managers. can complement weaker areas of the entrepreneur. are able to survive in the culture.

answer

As a firm grows, the small business owner needs to fill key positions with persons who

question

False

answer

Top-level executives in a large corporation have a distinct advantage over the leader of a small business in exerting their influence. True False

question

Tap into his personal and professional network.

answer

Marvin has just launched a consulting business. Business has been slower than expected. What advice would you give Marvin?

question

Small Business Development Centers

answer

Small business service organizations that are patterned after the Agricultural Extension Service are known as

question

Chain of command

answer

Having more than one supervisor is a violation of the:

question

True

answer

The greatest time saver is the effective use of time. True False

question

likely become fewer in number

answer

If a company successfully creates properly functioning self-managed teams among employees, the supervisors will

question

False

answer

Work teams require a lower level of participation of employees than empowerment. True False

question

span of control

answer

James is talking to another supervisor about the number of employees who report directly to him. James is talking about his:

question

False

answer

As a firm moves from Stage 1 to Stage 4, the entrepreneur becomes less of a manager and more of a doer. True False

question

strategic plan

answer

The owner of a rapidly growing small business needs to talk to a lender for additional financing. Which document would increase the company's credibility?

question

decrease the number of supervisors

answer

Marcia, owner of Drapes by Design, has groups of employees in production and installation. If she decides to use work teams as part of her leadership approach, she may be able to:

question

SBDC

answer

LaToya, as the owner of a minority firm, should look to which organization first for assistance?

question

False

answer

Small firms suffer a recruiting handicap because of the ability of large companies to offer more freedom on the job. True False

question

31 percent

answer

The cost of employee benefits is ____ the cost of salary and wage payments.

question

False

answer

Orientation refers to instructions given during the interview with an applicant. True False

question

False

answer

Job descriptions are used primarily to avoid lawsuits that might result from the Americans with Disabilities Act. True False

question

payroll

answer

One of the largest expense categories for most businesses is

question

15

answer

The Civil Rights Act applies to any employer of _______ or more people.

question

True

answer

Small companies are more likely to employ immigrants than larger firms. True False

question

Behavioral

answer

What type of interviewing involves asking applicants how they might react to hypothetical situations?

question

employee training

answer

Planned efforts to help workers master the knowledge, skills, and behaviors they need to perform their duties is known as

question

Compensation

answer

Which item plays the central role in attracting and motivating employees?

question

must negotiate if a majority of employees decide to unionize.

answer

A small electrical contractor with nine employees hears that they would like to join a union. This contractor realizes that the firm

question

True

answer

In small firms, a professional's versatility and flexibility may be more important than technical competence. True False

question

True

answer

ESOPs can motivate employees as well as allow for owners to withdraw from a business without having to sell the firm to outsiders. True False

question

employee stock ownership plans

answer

Small firms give employees a share of ownership in the business through

question

False

answer

Universities are good sources of candidates for positions that require a high level of experience. True False

question

False

answer

Because help-wanted advertising tends to be ineffective, most well-managed organizations reject this method of recruitment. True False

question

provide a more direct incentive in small firms than in large firms.

answer

Profit-sharing plans

question

give owners a way to cash out of the business

answer

In addition to it use to attract and hold key personnel, ESOPs can also:

question

True

answer

Small firms need to identify their distinctive advantages if they are to recruit outstanding prospects successfully. True False

question

False

answer

Employee benefits are expensive, amounting to more than 40 percent of payroll expense for many small firms. True False

question

False

answer

A job description refers to a listing of the knowledge, skills, abilities, and other characteristics necessary to perform a job. True False

question

more freedom to structure job responsibilities

answer

Judy, a small business owner of a CPA firm, wishes to persuade a highly qualified applicant to consider a position with her firm, even though the applicant has also had offers from large corporate CPA firms. What should Judy emphasize to the applicant?

question

employee benefits

answer

Employers will often provide such perks as health insurance and paid vacation that are designed to be attractive and useful to employees. Collectively these perks are known as:

question

temporary help agencies

answer

Since Cynthia needs to obtain a replacement for Olivia (who is having a baby and will be out for 12 weeks), what would be the expected first choice to locate a replacement?

question

Family and Medical Leave Act. Occupational Safety and Health Act. Fair Labor Standards Act.

answer

Legislation that provides protection to employees within a business is called the

question

respondents may fear litigation by former employees who fail to get jobs they seek.

answer

Karen is checking references and finds former employers reluctant to do more than verify dates of employment even though the applicants have given their consent. A probable reason for their reluctance is that

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