Entrepreneurship Exam 2 – Flashcards

It is recommended that new business owners estimate cash disbursements as best they can and then add on another ________.

CD Connection sells popular CDs at three price levels: $11, $14, and $17. This illustrates which of the following pricing techniques?

You are to prepare a projected income statement for a proposed business venture. Your desired net income (profit) is $28,000 and you have the following published statistics: Costs of goods sold = 56.9 percent of net sales Operating expenses = 37.1 percent of net sales Gross profit margin = 43.1 percent of net sales This information indicates the net sales on your pro forma "P & L" (income statement) would be:

Suppose you own cupcake shop in Denton. You have annual sales of $250,000, and operating expenses of $50,000. You also know from reviewing the RMA statement studies that operating expenses are 40% of annual sales. What would you earn in profit before taxes?

________ ratios tell whether or not the small company will be able to meet its short-term obligations

Which of the following statements concerning a company's target market is false? a. Marketing experts contend that the greatest marketing mistake small companies make is failing to clearly define the target market to be served. b. A "shotgun approach" to marketing-trying to appeal to everyone rather than to only a small market segment-is the most effective way to compete with large companies and their bigger marketing budgets. c. Small companies are usually better suited to pinpointing target markets that their larger rivals overlook or consider too small to be attractive. d. Most successful small businesses have well-defined portraits of the customers they are trying to attract.

On March 10, a business owner receives an invoice from a supplier for $416.27 with "net 30" credit terms marked on it. On April 7, the owner writes the supplier a check for $416.27 and mails it. When would this cash disbursement show up on the company's cash flows?

The average inventory turnover ratio:

Macy's buys white, pinpoint oxford blouses at $14 each and sells them at $30 each. Macy's percentage (of cost) markup is:

You are in the process of creating your financial statements. Suppose you buy a new piece of equipment, for which you pay a $2000 down-payment and finance the remaining $5000 on a 5-year note. What will happen to the balance sheet?

Which of the following associations is correct? Balance sheet - cost of goods sold Income statement - owner's equity Current assets - inventory Long-term liabilities - accounts payable

A recent survey reports that ________ percent of customers say that they will return to a business after a negative customer service experience if the company offers an apology, a discount, or proof that its customer service will improve.

The Sound Shop buys a popular programmable telephone from a supplier for $12.19. If the desired markup of retail price on the telephone is 35 percent, the retail price should be:

Suppose you are given the following information. You expect to have $50,000 in cash, $25,000 in supplies, and a building worth $100,000. You owe $75,000 towards the building on a long term note. You also have one customer that owes you $2000 for some work you did last week. What is the value for owner equity (i.e., your stake in the firm)?

Which of the following is not one of the objectives a guerrilla marketing plan should accomplish?

Ultimately, the "right" price for a product or service depends on one factor

The break-even point

Michelle Becker's target income in her business for the upcoming year is $78,500. The company's gross profit margin averages 32.6 percent of sales, and its total operating expenses run 24.7 percent of sales. To achieve her target income, sales of Michelle's company should be:

The statement of cash flows

Target market

Characteristics of a Great Product

Income statement

Balance Sheet

Statement of Cash flows

Most important base estimate of your business plan?

Differentiate between cash and profit. Can a business earn profit but fail due to cash flow? Provide an example of such a situation, if this situation can in fact occur.