Small Business Final Review – Flashcards
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An entrepreneurial career can provide an exciting life and substantial rewards while also helping the welfare of society
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True
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According to the text the term entrepreneur refers to small business founders only
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False
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A primary reason for becoming an entrepreneur is to create a product or service that makes the world a better place.
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True
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A large percentage of small business owners cite their desire to their own boss as the man resource of their previous employers.
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True
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Persons who leave an undesirable work to go into business for themselves is an entrepreneurial refugee.
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True
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A refugee is a person who tried being an entrepreneur and failed and sought refuge in corporate employment.
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False
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small entrepreneurial firms cannot hold their own or gain an edge over successful firms
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False.
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small firms have a great disadvantage when it comes to competing based on customer service.
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false
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many entrepreneurs are innovators.
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true
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paternalism is distinguishing characteristic between artisan and opportunistic business.
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true
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although the timing may vary for individuals the ideal age for starting is 35-50
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false 25-35
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most entrepreneurs are high risk takers
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false
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it is futile for small business to attempt to develop strategies that offer a company more exposure to mature businesses
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false
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new ventures are more often financed mostly with a founders personal savings rather than a plan provided by a venture capitalist.
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true
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many entrepreneurs are people of principle and integrity regulates their quest for profits
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true
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small businesses that practice skimming of income are acting unethically and illegally
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true
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temptations and pressures act to unethically are thought to be greater in big business than in small business
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false
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the essence of ethical relativism is captured in the following statement: when in rome do as the romans
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True
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Judeo-Christian values have traditionall been left in churches and have no impact on the marketplace
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false
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the goodwill gained from benefiting the community may be worth more than it's cost
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True
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the BBB is a government agency that encourages ethical business practices
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false
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in most cases environmentalism have contributed to the profitability of small firms
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false
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the interest of small business owners and environmentalists are not always in conflict
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true
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the ethics resource center has adapted a 6 step process to help small businesses se issues more clearly and make better, more ethical decisions.
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true
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which statement is an example of an economic trend?
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the federal reserve announces that it will decrease the interest rate charged.
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substitute products
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are usually cheaper than the products they can replace.
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A SWOT analysis can be described best as:
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a concise overview of the firms strategic situation.
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generally speaking a strategy is:
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an action plan that guides resource investments
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the two board strategies for building a competitive advantage are the _______ strategies
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cost based and differentiation based
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a differentiation based strategy requires that a firm
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emphasize the uniqueness of its product or services.
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Mark is the owner of Delectable delights a specialty store offering chocolates candies and all these goodies. After a recent analysis of the competitive environment, Mark concluded that three distinct consumer segments exist for his products A,B,and C consumers. In an effort to maximize the effectiveness of its strategy, mark has decided to focus on fulfilling the needs of A consumers. He is employ a ______ strategy
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Focus
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Which action is a cause for erosion of all small firms focus strategy:
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the focus strategy is imitated
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an entrepreneur would choose a franchise over an independent startup most likely because of the:
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probability of success.
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the cost of a franchise may include
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a one time federal franchise tax
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an entity or individual granted the right to conduct business according to specified methods and terms of another party is known as
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franchisee
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A legal agreement between two parties in a franchise arrangement is referred to as a
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franchise contract
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an entity or individual that grants another party the right to conduct business according to specified methods and terms is known as a
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franchisor
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the rights conveyed by a franchising agreement are referred to as
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the franchise
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products and trade name franchising is best illustrated by the system offered by
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exom mobil
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business format franchising is best illustrated by the system offered by
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subway
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A subway franchise located inside a subway is called_______ franchising
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piggybacking
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in what way is a franchisee's control over the business greatly reduced?
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the franchisee is bound by the terms the franchise contracts.
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the disclosure statement provided to a prospective franchisee must contain all correct information except:
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strategic plans for future
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one of the most important features of the franchise contracts is the provision related to
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termination and transfer of the franchise
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steve, harry and chris who own and run a family auto parts stor are having bad times during a downturn in the local economy to help the store stay alive they agree to each take 25% reduction in salary for a year this is an example of
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an important advantage of a family business
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A founders core values may become part of the family business culture because:
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others in the firm absorb traditions and values established by the founder
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Patricia a non family employee of a family business is concerned with competing family members for future career opportunities. to protect her interests she should
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ask that the owner clarify the extent of opportunities considering her skill sets.
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what are 3 basic objectives of a business plan
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identify the nature and the content of the business to outline the approach the entrepreneur plans to use to do well to recognize factors that will determine whether or not the venture will be successful
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prospective investors have one goal what is it.
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to maximize potential return on an investment through cash flows that will be received while minimizing the risk they're taking
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are investors more product or market oriented and why?
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market oriented, realizing that most patented inventions never earn a dime for the inventors.
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what is a subscription
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a customer pays a fixed amount for services. Sirius satellite radio
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definition of small business marketing
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business activities that direct the creation development and delivery of a bundle of satisfaction from the creator to the targeted user.
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describe the differences between actual core and augmented product
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core: simple solution : something to hold money actual: the actual product: wallet augmented: supped up product: purse
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3 differencing marketing philosophies
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product oriented: product of the single most important part of the business sales oriented: focusing on the purchasing product and achieving sales goals is first priority.
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4 elements that make up the marketing mix
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product, place, promotion price (distribution activities)
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define market and the 3 elements that it consists of
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market: a group of customers who have purchasing power. 1.) customers 2.) purchasing power 3.) unsatisfied needs
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2 major segmentation variables:
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benefit variables: specific characteristics that distinguish market segments according to the business sought by customers demographic variables: specific characteristics that describe customers and their purchasing power
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advantages of LLC
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Liability protection it affords
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what types of business must put customer access first
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selling to end users of product retail customer
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what is a business incubator
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a facility that rents space to new businesses or to people wishing to start businesses
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why aren't firms cash flow equal to its profits
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you have to make sure you check the balance sheet. you my have money left in accounts recievable that hasn't been collected yet.
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what is the basic equation for a balance sheet?
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total assets= debt + ownership equity
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as sales increase what will typically increase
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assets requirements
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what is a term loan?
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set for a couple of year. car loan between 3-5 years
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what is the definition of CRM
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customer relationship management. it is a world wide business strategy designed to optimize profitability and customer satisfaction by focusing on specific customer groups.
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what are four options available to a customer who is dissatisfied.
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publically obtain legal action against business privately complain to business stop buying do nothing
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describe the data needed for a customer profile
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transaction, customer contacts, descriptive information, responses to marketing stimuli
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4 stages in the correct order consumer decision
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needs recognition, information, purchase decision, post purchase
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two basic influences on consumer behavior.
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1.) psychological: needs, perceptions, motivations, attitude 2.) sociological: cultures, social class, reference groups, opinion leaders
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what is a sustainable competitive advantage? example.
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a value creating position that is like to endure overtime. (KFC- colonels recipe)
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difference between brand mark, brand image and brand name:
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brand mark- tangible nike swoosh brand make - tangible Walmart brand image- intangible: nike athlete just do it.
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how does social class influence buying behavior?
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peer pressure expectation of society
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Holly wood amusement, a small independent movie theater decreased its price for admission from 10 to 9 dollars before the price drop they only sold 1000 tickets a month now they are selling 1500 a month this theater faces _______ demand for its tickets
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elastic demand
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demand for a product typically:
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decreases as prices increases.
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what is a product
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a total bundle of satisfaction whether it service good or both offered to consumers in an exchange transaction
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what is the difference between a trademark and a copyright
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trademark: coca cola: red color bottles copyright: bovies
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what is trade dress:
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what the employees will always wear and what they must be known for. ex: Target : Red Shirt Khakis
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the major objective of a firm in granting credit is
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make sakes
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Hillary wants to purchase a refrigerator on credit, if she uses an installment plan what will occur
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a down payment will be required
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a trade credit bill of 80,000 with terms sale of 2/5 net 30 means the buyer saves______ if the buyer paid within the discount period
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1600
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know the break even equation to solve this with these numbers $3000 a month, 12000 per month for the building
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...
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one of the largest expense categories for most businesses is
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payroll
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which source of employees do small business owners say accounts for most of their business are
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employees
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The American with disabilities act the number to remember is
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15 and resonable
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new employees benefit most from orientation when it is given
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during the first two or three days on the job
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small firms give employees a share of ownership in the business through
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employee stock ownership plans
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which item plays the central role in attracting and motivating employees
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compensation
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the civil rights act applies to any employer of
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15 or more people
