MGT602- Entrepreneurship
All of the following are essentials to maintain secrecy, EXCEPT:
► Train employees to refer sensitive questions to one person
► Discuss business in public places
► Provide escorts for all office visitors
► Use simple security such as locked file cabinets
To maintain secrecy
1. Train employees to refer sensitive questions to one person.
2. Provide escorts for all office visitors.
3. Avoid discussing business in public places.
4. Use simple security such as locked file cabinets and shredders.
An individual’s desirability to form a new venture depends upon all of the following Except:
► Culture
► Family
► Teachers
► Personal savings
The perception that starting a new company is desirable results from an individual’s culture, subculture, family, teachers and peers.
Identify the type of innovation which refers to new products with significant technological advancement.
► Ordinary innovation
► Technological innovation
► Breakthrough innovation
► Technical innovation
• Most innovations introduced in the market are ordinary innovations, with little uniqueness. • Technological innovations refer to new products with significant technological advancements. • Breakthrough innovations mean the development of new products with some technological change
Which of the following is a fourth step in the entrepreneurial process?
► Developing successful business ideas
► Deciding to become an entrepreneur
► Growing the entrepreneurial firm
► Moving from an idea to an entrepreneurial firm
Ref:
http://wps.prenhall.com/bp_barringer_entrep_1/29/7476/1913875.cw/content/index.html
“Paying for goods indirectly through another source” refers to:
► Barter
► Trading
► Third-party arrangement
► Balance of payment
Which one of the following should consider in economy while conducting environmental analysis?
Select correct option:
GNP
Disposable income (solved by Tariq)
Unemployment
Channel of distribution
Economic Trends: The macro economic environment analysis will identify trends such as changes in personal disposable income, interest rates, inflation and unemployment rates.
Which of the following source of capital is relatively faster and less costly than other funding?
Select correct option:
Outsourcing
Public offering
Private offering (solved by Shamir)
Bootstrap financing
page # 89:
A private offering is faster and less costly than other funding.
Future of the new venture depends on the ________.
Select correct option:
Positive Cash flow (solved by Shafia)
Employees loyalty
Business ideas
Economy
Which of the following ratio will be helpful for assessing the firm’s capital structure?
Select correct option:
Current ratio
Acid test ratio
Profitability ratio
Debt to equity ratio (solved by MK)
Page # 100 :
Debt to equity ratio assesses the firm’s capital structure. It provides a measure of risk by considering the funds invested by creditors and investors.
Following are the types of non equity arrangements EXCEPT:
Select correct option:
Licensing
Management contracts
Direct export (solved by MK)
Turnkey projects
Page no 31 Lesson 11
Which of the following is essential if your business deals with the Paper production?
Select correct option:
Operational Plan
Bank loan
Production plan (solved by MK)
Organizational plan
Page 58
If a new venture is a manufacturing operation, a production plan is necessary. This plan should describe the complete manufacturing process, including whether or not the process is to be subcontracted.
An individual’s need to be recognized is called:
Need for independence
Need for affiliation
Need of fame
Need for achievement
The startups which rarely go public are called:
Select correct option:
Life style
Foundation Company (solved by MK)
Small company
High potential venture
page no 8 :
A type of company formed from research and development that usually does not go public. This firm can grow in five to ten years from 40 to 400 employees.
Which of the following firm achieves modest growth:
Select correct option:
High potential growth firm
Foundation firm
Life style (Solved by Zubair)
Public company
Which of the following factor can create the managerial difficulties in the joint ventures between foreign companies?
Select correct option:
Cultural differences (solved by MK)
Economic policies
Public ignorance
Government taxes
Page no 103 :
Cultural differences can create managerial difficulties. Government policies sometimes can have a negative impact on the venture. The benefits usually outweigh the drawbacks.
________ is commonly used to measure the short-term solvency of the venture?
Select correct option:
Debt to equity ratio
Current ratio (solved by MK)
Profitability ratio
Activity ratio
Page no 99 :
Current ratio is commonly used to measure the short-term solvency of the venture or its ability to meet its short-term debts.
___________ process of creating incremental wealth is called Entrepreneurship.
Dynamic
Static
Continuous
Systematic
Entrepreneurship is the dynamic process of creating incremental wealth. Our definition of entrepreneurship involves four aspects.
Which of the following makes the formation of new venture difficult within a corporate
culture?
Lack of intrapreneurial talent
Lack of freedom to make autonomous decisions
Lack of market opportunity
All of the given options
Which of the following institute started the LMM financing scheme?
PSIC
SSIC
SIDB
IDBP
Financing Schemes
The SSIC also launched a credit scheme in 88,/89. The rate of markup was 7%
for industrial estates and 11% for factories outside the industrial estates. The
scheme was discontinued in 1993 due to shortage of funds although SSIC has
created already 526 jobs and disbursed 20.6 million rupees. In October 1992, a
self-employment scheme was started for locally manufactured machinery
(LMM). The loan ceiling is 1 million with the markup rate of 14%. The total
amount disbursed to 171 units is rupees 98 million. The recovery rate is 47%.
Barriers to new product creation and development are known as:
Trial and error
Opportunity parameters
Opportunity cost
Intrapreneurship culture
Page # 14, Lecture # 04
Opportunity parameters
Barriers to new product creation and development
A/an ______ is an online connection between the company and its customers.
E-Commerce
World Wide Web
Internet advertising
Website
Website
A website is an online connection between the company and its customers and can be developed in-house or outsourced. There are several important features of every website. Each website should have search capabilities. Other functions include shopping cart, secure server connection, credit card payment, and customer feedback features. Orders and other sensitive customer information should be transferred only through secure servers. An Internet company should also obtain a merchant account, which will allow the acceptance of major credit cards.
Which one of the following is the next stage to the Concept Stage of Product Planning
and Development Process?
Idea Stage
Product Planning Stage
Product Development Stage
Test Marketing Stage
Test Marketing Stage
Although the results of product development stage provide the basis of the final marketing plan, the market test can be done to increase the certainty of successful commercialization. The last step in the evaluation process, the test marketing stage, provides actual sales results which dicate the acceptance level of consumers. Positive test results indicate the degree of probability of a successful product launch and company formation.
Which one the following is the best protection against product liability?
Avoid negligence
Warn consumers of any potential hazards
Give warranty
Avoid misrepresentation
Reference:
page 52 Lesson 20
Misrepresentation occurs when advertising or other information misrepresents material facts concerning the quality of the product. The best protection against product liability is to produce safe products and to warn consumers of any potential hazards.
Who should prepare the business plan?
Entrepreneurs
Consultants
Engineers
Small business administration services
A business plan is a written document prepared by the entrepreneur that describes all the relevant external and internal elements involved in starting a new venture.
Information regarding all of the following is related to operations, EXCEPT:
Location
Promotion
Raw materials
Labor skills
Reference:
page56 Lesson22
Operations Information Needs
The entrepreneur may need information on:
1. Location
2. Manufacturing operations
3. Raw materials
4. Equipment
5. Labor skills
6. Space
7. Overhead
Each item may require some research but is needed by those who will assess the business plan.
A foundation company is formed from:
Fashion
Most popular business
A winding up company
Research and development
Reference:
page 8 Lesson 3
Foundation Companies
A type of company formed from research and development that usually does not go public. This firm can grow in five to ten years from 40 to 400 employees.
Which one of the following is a section of patent application?
All of the given options
Introduction
Description of business
Claims
Reference: page 47 Lesson 18
The Patent Application
The patent application must contain a complete history and description of the invention as well as claims for its usefulness. The application is divided into sections: The Introduction Section contains the background and advantages of the invention and the nature of problems it overcomes. The description of Invention Section, this section contains a description of the drawings, which must comply with PTO requirements. A detailed description of the invention follows, including engineering specifications, materials, and components. In Claims Section, Claims are the criteria by which any infringements will be determined. Essential parts of the invention should be described in broad terms. The claims must not be so general that they hide the invention’s uniqueness. The application should contain a declaration signed by the inventor.
In inventory loans, finished goods inventory can be financed up to what percent of
inventory value?
50%
70%
80%
100%
Reference: page 83 Lesson 33
Inventory loans.
a. Inventory is often a basis for a loan, particularly when inventory is liquid and can be sold easily.
b. Finished goods inventory can be financed up to 50% of value.
c. Trust receipts are a type of inventory loan used to finance floor plans of retailers such as auto dealers.
d. The bank advances a large percentage of the invoice price of the goods and is paid a pro rate basis as the inventory is sold.
A source of cash resulting from an entrepreneur selling the business is called:
Earnings valuation
Positive cash flow
Negative cash flow
Terminal value
Reference: page 105 Lesson 44
Final cash flow value, the terminal value, is a source of cash when the entrepreneur sells the business.
Which of the following is NOT among the three perspectives that should be considered
in preparing a business plan?
Marketing perspective
Perspective of the entrepreneur
Investor perspective
Technical perspective
Reference: Page 54 Lesson
Three perspectives need to be considered: The entrepreneur understands the new venture better than anyone. The marketing perspective considers the venture through the eyes of the customer. The investor looks for sound financial projections
In which of the following techniques, money is given to a firm for developing a
technology and involves a tax shelter?
Small business administration loans
Cash flow financing
Small business innovation research grant
Research and development limited partnership
Reference: page 87
RESEARCH AND DEVELOPMENT LIMITED PARTNERSHIPS
This method of financing provides funds from inventors looking for tax shelters.
A party in an agreement that usually supplies money and has a few responsibilities is
known as:
Limited partner
Major partner
Minor partner
General partner
Reference: page 87
RESEARCH AND DEVELOPMENT LIMITED PARTNERSHIPS
This method of financing provides funds from inventors looking for tax shelters. A typical R&D
partnership arrangement is established with a sponsoring company developing the technology
with funds being provided by a limited partnership of individual investors. Research and
development limited partnerships are particularly good when the project involves a high degree
of risk or significant expense.
The overall coordinating party in an agreement is:
Limited partner
Major partner
Minor partner
General partner
Reference: page 68
The proprietor and general partners are liable for all aspects of the business
How many industrial estates does Punjab Small Industries Corporation have developed in
various areas of the Punjab?
8
14
18
24
Reference:
page 91, Lesson 37
(b) Industrial Estates
PSIC has developed 14 industrial estates in various areas of the Punjab. The costs of land within
these industrial states have been subsidized to allow the development of the small-scale sector.
The actual amounts of costs and profits are compared with budgeted amounts for a
specific period through:
Interim income statement
Interim balance sheet
Pro forma income statement
Pro forma cash flows
Reference: page 99 Lesson 41
MANAGING COSTS AND PROFITS
An interim income statement helps to compare the actual with the budgeted amount for that
period. The most effective use of the interim income statement is to establish cost standards and
compare the actual with the budgeted amount for that time period. Costs are budgeted based on
percentages of net sales
Which of the following is a liquidity ratio?
Acid test ratio
Average collection period
Inventory turnover
Debt to equity ratio
Reference:
Page # 99
Acid test ratio is a more rigorous test of the short-term liquidity of the venture.
In the U.S. joint ventures were first formed for large-scale projects in which of the
following options?
1600s
1700s
1800s
1900s
Reference: page103 Lesson 43
Historical Perspective Joint ventures are not new. In the U.S. joint ventures were first used for large-scale projects in mining and railroads in the 1800s.The largest joint venture in the 1900s was the formation of ARAMCO by four oil companies to develop crude oil reserves in the Middle East. Domestic joint ventures are often vertical arrangements made between competitors allowing economies of scale. The increase in the number of joint ventures has been significantly throughout the 1990s.
The marketing plan section of the business plan should focus on strategies for how many
years of the venture?
2
3
4
5
Reference page 62 Lesson 25
PURPOSE AND TIMING OF THE MARKETING PLAN
The marketing plan establishes how the entrepreneur will effectively compete and operate in the marketplace. Marketing planning should be an annual activity focusing on decisions related to the marketing mix variables. The marketing plan section should focus on strategies for the first three years of the venture. For the first year, goals and strategies should be projected monthly. For years two and three, market results should be projected based on longer-term goals. Preparing an annual marketing plan becomes the basis for planning other aspects of the business.
Which of the following represents the environment in which entrepreneurship can’t
grow?
Boom
Vacuum
Maturity
Introductory Phase
Its correct answer is "vacuum" because rest three are not environment rather these are different stages of business. As the main feature of entrepreneurship is "independence”. So in vacuum environment an entrepreneur cannot grow.
Which of the following shows the standard acceptable term of a Limited Liability
Company?
Three
Ten
Twenty
Thirty
Reference:
page 66 Lesson 29
6. The standard acceptable term of an LLC is 30 years.
In which of the following only one class of stock is permitted?
C Corporation
S Corporation
Limited Partnership
The board of advisors:
Reference:
S corporation rules do not permit distributions to one shareholder without corresponding distributions to all shareholders, because only one class of stock is permitted and distribution right must be identical.
Which of the following shows the characteristic of the partnership with reference to
taxation system?
Single taxation system
Double taxation system
Triple taxation system
No taxation system
B. Tax Issues for Partnership.
The proprietorship has some tax advantages compared to the corporation.
a. There is no double tax on profits.
b. The partnership’s tax advantages and disadvantages are similar to the proprietorship. Limited partnerships can provide unique tax advantages. Both the partnership and proprietorship have a legal identity distinct from the partners, but this identity is only for accounting purposes. The income is distributed based on the partnership agreement, and the owners then report their share as personal income.
Which of the following is true about equity financing?
It requires some asset be used as collateral
The entrepreneur has to pay back the amount of funds plus a fee
The investor shares in the profits of the venture
It is, generally, used to provide working capital
Reference:
Page 81, Lesson 32
Different sources of capital are generally used at different times in the life of the venture.
Debt or Equity Financing
1. Debt financing involves an interest-bearing instrument, usually a loan, the payment of which is only indirectly related to sales and profits.
a. Debt financing (also called asset-based financing) requires some asset be used as collateral.
Which of the following cannot be used as basis of loan?
Worth of the business
Perishable item
Fixed asset
All of the given options
Reference
Perishable item
Perishable food is liable to perish, decay or spoil rapidly such as fresh meat, fresh and frozen seafood, ripe fruits, and vegetables.
Which of the following is the key factor for choosing the type of financing?
Availability of funds
Assets of the venture
Prevailing interest rates
All of the above options
Reference
Page 81
Key factors in choosing the type of financing are availability of funds, assets of the venture, and prevailing interest rates.
Which of the following is the most important aspect of locating viable sources of
funding?
Patent and trademark office
NGOs
Rate of return
Funding source profile
Reference: page 94 Lesson 37
The Role of NGOs
The NGOs are working on socio-economic sector in the development of SMEs. They are
privately owned organization registered under the social welfare act. They normally work
through grants, aids or donation based finances. They are having a very constructive role in the
SME development. The special property of this sector is gender development. They at some
places tried to replicate Grameen banks model.
Which of the following loan is for a maximum duration of 40 days?
Long term loan
Straight commercial loan
Installment loan
Character loan
Installment loans can be obtained by a going venture with a track record of sales and profits.These funds are used to cover working capital needs, usually for 30 to 40 days.
Which of the following is NOT a form of cash flow financing?
Installment loan
Character loan
Inventory loan
Line of credit
Reference:
Page 82, Lesson 33
Cash Flow Financing Cash flow financing -- or conventional bank loans --include lines of
credit, installment loans, straight commercial loans, long-term loans, and character loans.
In entrepreneurship the starting capital is also called:
Equity Capital
Seed Capital
Financial Capital
Short term Capital
Reference: page 55 Lesson 21
Equity contribution or the amount of personal equity that has been invested by the
entrepreneur.
My money manager software is the example of which of the following?
Accounting software
Marketing software
General use software
Gaming software
What are the number of questions a marketing plan usually answers?
5
2
3
4
Reference: page54 Lesson 24
Understanding the marketing plan
The marketing plan should answer three basic questions:
1) Where have we been? -The history of the marketplace, marketing strengths and weaknesses, andmarket opportunities.
2) Where do we want to go (short term)? - Marketingobjectives and goals in the next twelve months.
3) How do we get there? -Specific marketing strategy that will be implemented. The marketing plan should be a guide for implementing marketing decision-making and not a superficial document. The mere organization of the thinking process involved in preparing a marketing plan can be helpful in understanding and recognizing critical issues.
__________ is usually represents one or more segments of the entire market.
Local market
Target market
Market orientation
Market segmentation
The defined target market will usually represent one or more segments of the entire market.
Which of the following analysis represent the review of "where the company has been"?
Situation analysis
Competitor Analysis
Goal analysis
Program Analysis
Reference: page 65 Lesson 26
Defining the Business Situation
The situation analysis is a review of where the company has been and considers many of the environmental factors. The entrepreneur should provide a review of past performance of the product and the company. Industry analysis should include information on market size, growth rate, suppliers, new entries, and economic conditions.
Targeting the market consists of ______ Procedures
4
1
2
3
Reference: page 58 Lesson 26
Defining Target Market/Opportunities and Threats
The entrepreneur should have a good idea of who the customer or target market will be. The defined target market will usually represent one or more segments of the entire market. Market segmentation is the process of dividing the market into smaller homogeneous groups.. The process of segmenting is:
a. Decide what general market or industry you wish to pursue.
b. Divide the market into smaller groups based on characteristics of the customer.
c. Select segment or segments to target.
d. Develop marketing plan integrating the parts of the marketing mix.
Which of the following is one of the new forms of business?
Corporation
Proprietorship
Limited liability company
Partnership
Reference: page 61 Lesson 27
Limited liability company
A new form is the limited liability company, which is now possible in most states.
The entrepreneur should evaluate the pros and cons of each of the legal forms prior to submitting a business plan. He should determine the priority of several factors discussed below. It is also necessary to consider intangibles such as image to suppliers, existing clients, and prospective customers.
Which of the following techniques is an excellent method for initially screening ideas and concepts in addition to generating new ideas?
► Focus group
► Problem inventory analysis
► Brain storming
► Reverse brainstorming
Focus Groups – these are the groups of individuals providing information in a structural format. A moderator leads a group of people through an open, in-depth discussion rather than simply asking questions to solicit participant response. Such groups form comments in open-end in-depth discussions for a new product area that can result in market success. In addition to generating new ideas, the focus group is an excellent source for initially screening ideas and concept.
Which form of the business distributes profits to owners through dividends?
Corporation
Proprietorship
Partnership
None of the above
Reference: page64 Lesson 28
• Stockholders can indirectly affect the operation by electing someone to the board of
director
Which one of the following is NOT a condition of a contract?
An offer is made
An acceptance of offer
Counter offer
Consideration is given
__________ shows the entrepreneur’s credit rating or credit worthiness.
Character
Collateral
Capacity
Capital
Which one of the following is NOT a condition of a contract?
An offer is made
An acceptance of offer
Contract must be illegal
Consideration is given
Which one of the following has NO liability on the part of entrepreneur business?
Board of directors
Board of advisors
Shareholders
Partners
Board of advisors can be used to support the management of a new venture but they has NO liability on the part of entrepreneur business.
Which type of Job analysis enlists the qualification of individual?
Job Description
Job Specification
Job identification
All of the above options
Reference: http://humanresources.about.com/od/jobdescriptions/Job_Descriptions_Free_Samples_Examples.htm
Job Specification
A job specification describes the knowledge, skills, education, experience, and abilities you believe are essential to performing a particular job. The job specification is developed from the job analysis. Ideally, also developed from a detailed job description, the job specification describes the person you want to hire for a particular job.
Which of the following is a written statement that defines the duties, relationships and
results expected of anyone in the job?
Job Description
Job Specification
Job identification
All of the above options
Reference: http://humanresources.about.com/od/jobdescriptions/Job_Descriptions_Free_Samples_Examples.htm
Job Description
Job descriptions are written statements that describe the duties, responsibilities, most important contributions and outcomes needed from a position, required qualifications of candidates, and the reporting relationship of a particular job.
Before developing the pro forma income statement, the entrepreneur should prepare:
► Operating budget
► Capital budget
► Sales budget
► Both operating and capital budgets (Solved by Emman)
Page # 75, Lecture # 30
Before developing the pro forma income statement, the entrepreneur should prepare
operating and capital budgets.
Which of the following statement provides projections of all operating expenses for each
month of the first year?
The pro forma balance sheet
The pro forma income statement
The pro forma cash flow statement
The actual balance sheet
Reference: page 78 Lesson
The pro forma income statements also provide projections of all operating expenses for each month of the first year. 1. Selling expenses as a percentage of sales may also be higher initially. 2. Salaries and wages should reflect the number of personnel employed, as well as their roles in the organization. 3. Any unusually expenses, such as those for a key trade show, should be flagged and ex-plained at the bottom.
An entrepreneur doing business within the national border is called:
► International entrepreneurship
► Intrapreneurship
► Domestic entrepreneurship
► None of the given options
Which of the following is NOT the determinant of entrepreneur's ownership?
Equity
Cash
Debt
None of the given options
Reference: page 81 Lesson 32
Different sources of capital are generally used at different times in the life of the venture.
Debt or Equity Financing
1. Debt financing involves an interest-bearing instrument, usually a loan, the payment of which is only indirectly related to sales and profits.
a. Debt financing (also called asset-based financing) requires some asset be used as
collateral.
b. The entrepreneur has to pay back the amount of funds borrowed plus a fee, expressed in terms of interest.
To what extent does Small Business Administration guarantee if entrepreneur can not pay the loan?
50%
75%
80%
100%
Reference: page 77Lesson 34
SMALL BUSINESS ADMINISTRATION LOANS
A. When an entrepreneur is unable to secure a regular commercial bank loan, an alternative is a Small Business Administration (SBA) Guaranty Loan.
1. The SBA guarantees that 80% of the loan will be repaid to the bank by the SBA if the company can’t pay.
All of the following are similar to the cash flow, EXCEPT?
► Inward cash
► Outward cash
► Profit (Solved by Emman)
► Sales volume
Which of the following is a separate entity that involves a partnership of two or more
participants?
Merger
Joint venture
Corporation
Acquisition
Reference:
http://books.google.com.pk/books?id=lpMTftc5XCEC&pg=PT67&lpg=PT67&dq=%22separate+entity+that+involves+a+partnership+%22&source=bl&ots=EFCDwUG7pG&sig=vm_IDKSCzoHfHihicwUddfM3Aw&hl=en&ei=Y6hFTOCXEcG88gaj8b3XBA&sa=X&oi=book_result&ct=result&resnum=1&ved=0CBMQ6AEwAA#v=onepage&q=%22separate%20entity%20that%20involves%20a%20partnership%20%22&f=false
A joint venture is a separate entity that involves a partnership between two or more active from goole books
The purchase of an entire company or part of a company such that it is completely
absorbed in purchasing firm is known as:
Acquisition
Integration
Joint venture
Conglomerate
Reference page 104 Lesson 43
ACQUISITIONS An acquisition is the purchase of a company or a part of it in such a way that the acquired company is completely absorbed and no longer exists. Acquisitions can provide an excellent way to grow a business and enter new markets. A key issue is agreeing on a price. Often the structure of the deal can be more important to the parties than the actual price. A prime concern is to ensure that the acquisition fits into the overall direction of the strategic plan.
Using which of the following, the entrepreneur values the underlying worth of the
business based on its assets?
Asset valuation
Owners equity
Liquidity ratio
Asset turnover
Reference page 105 lesson 44
Valuation Approaches
Ratios measuring profitability, activity, and liquidity can also be helpful in evaluation. Using the asset valuation method, the entrepreneur values the underlying worth of the business based on its assets.
Which of the following statement is NOT correct?
SBFC is financing various types of projects such as Gem Stones and cotton ginning
SBFC can disburse up to rupees 1.5 million for a project having total cost of five million
SBFC lend up-to 50% of the total project cost having cost less than 50 million
It can also share up to 30% of total projected cost for a medium sized having cost more than 100 million Rupees
Reference: page 92 Lesson 37
Financing Programs
SBFC is financing various types of projects such as Gem Stones, cotton ginning, textile apparel,
and marble processing etc. currently SBFC can disburse up to rupees 1.5 million for a project
having total cost of five million and lend up-to 50% of the total project cost of small businesses
but for that total project cost should not exceed 50 million. It can also share up to 30% of total
projected cost for a medium sized industry where the total project cost does not exceed rupees 100 million.
Which of the following plan describes market conditions and strategy related to products?
► Production plan
► Operational plan
► Financial plan
► Marketing plan
Which of the following is usually included in production plan?
Pricing
Evaluation of the weaknesses of the business
Names of suppliers of raw materials
Flow of orders for goods and/or services
Which one of the following effectively controls the objectives of Marketing Plan?
Product Promotion Strategy
Distribution Strategy
Monitoring
Pricing Strategy
All of the followings are the criteria for bank lending decisions, EXCEPT:
Review of past financial statements
Evaluation of future projections on market size, sales, and profitability
Taking into account intuitive factors
A casual review of the borrower by the loan officer
What is the percentage of Pakistani entrepreneurs that have college education?
30%
10%
60%
45%
Reference:
Page 108, lesson 45
Educational Level of Pakistani Entrepreneurs:
“Differing from industry to industry 60% have school education and 30% have college or better education only 10% have professional or graduation level”.
In order to make organization more flexible and responsive it should tend towards which
of the following?
Centralization
Decentralization
Employee Motivation
Less vulnerable to change
Decentralization is scaled back and major strategic decisions are again centralized. To understand what is required for effective planning, reporting, and control, the entrepreneur should consider
Which one of the following options has NOT a total taxable entity?
Minor partner
Limited partner
General partner
All of the given options
Page # 87, Lesson 35
The limited partners have limited liability but are not a taxable entity.
Gazelles are the firms with:
High growth rate
Moderate growth rate
Zero% growth rate
Low growth rate
Reference
Page # 7 Lecture # 2
Gazelles Very high growth ventures.
Individuals influencing an entrepreneur s career choice and style are known as:
Role model
Moral-support network
Professional support network
Support system
Reference:
Page # 22 Lesson # 10
ROLE MODELS AND SUPPORT SYSTEMS One of the most important factors influencing entrepreneurs in their career choice is role models. Role models can be parents, relatives, or successful entrepreneurs in the community. Role models can also serve in a supportive capacity as mentors during and after the new venture is launched. This support system is most crucial during the start-up phase.
Following are the problems in developing the economies EXCEPT:
Gap of knowledge
Variable rate of return
Same communication style (solved by Princess Sassi)
Different accounting system
Reference page 25 Lesson 11
a. Gaps in the knowledge of the Western system regarding business plans, marketing,
and profits
b. Widely variable rates of return.
c. Non-convertibility of the ruble.
d. Differences in the accounting system.
e. Nightmarish communications.
Which one of the following is NOT an environmental factor?
Economy
Culture
Technology
Competition(solved by Princess Sassi)
Reference page 57 Lesson 22
environmental factors are:
Economy Culture Technology Legal concerns All of the above external factors are generally uncontrollable Next the entrepreneur should conduct an industry analysis that focuses on specific industry trends.
Which of the following kind of need should be documented by the entrepreneur before preparing the plan?
► Market
► Customer
► Investor’s
► His own
WHY SOME BUSINESS PLANS FAIL
A poorly prepared business plan can be blamed on:
• Goals set by the entrepreneurs that are unreasonable.
• Goals those are not measurable.
To be successful
• Goals should be specific.
• They should also be measurable and should be monitored over time.
The entrepreneur who has not made a total commitment to the business will not be able to meet the venture’s demands of the venture. Investors will not be positive about a venture that does not have full-time commitment. Investors will typically expect the entrepreneur to make significant financial commitment to the business. Lack of experience will result in failure unless the entrepreneur can gain knowledge or team up with someone. The entrepreneur should also document customer needs before preparing the plan.
Which one of the following guide the firm through the long term decision making?
Mission statement
Product forecast
Industry analysis
None of the given options
Reference:
Page # 56, Lesson # 22
Description of the Venture
The description of the venture should be detailed in this section. This should begin with the mission statement or company mission, which describes the nature of the business and what the entrepreneur hopes to accomplish. The new venture should be described in detail, including the product, location, personnel, background of entrepreneur, and history of the venture. The emphasis placed on location is a function of the type of business. Maps that locate customers, competitors, and alternative locations can be helpful. If the building or site decision involves legal issues, the entrepreneur should hire a lawyer.
Which one of the following is NOT included in four C s evaluation by lender?
Character
Cost
Continuity
Contribution
Reference & Explanation:
Page #47 Lesson #21
Lenders are primarily interested in the ability of the new venture to pay the debt and focus on the four C’s of credit:
1. It Entrepreneur’s credit history or character.
2. Their ability to meet debt and interest payment(cash flow)
3. The collateral or tangible assets being secured.
4. Equity contribution or the amount of personal equity that has been invested by the entrepreneur.
Which one of the following can be registered under design patent?
New product
Original product
Ornamental
All of the given options (solved by Princess Sassi)
Reference page 47 Lesson 18
Design Patents
Covering new, original, ornamental, and unobvious designs for articles, a design patent reflects the appearance of an object. These are for a 14-year term and provide a negative right, excluding others from making an article having the same ornamental appearance. Filing fees are lower than for utility patents.
Which of the following is an idea generation method that focuses on parameters?
Brainstorming
Reverse brainstorming
Creative problem solving (solved by Princess Sassi)
Synectics
Reference: page 41 Lesson 16
Parameter analysis Parameter analysis is developing a new idea by focusing on parameter identification and creative synthesis.
The transitional disturbance and lack of reform has led to a booming black market in:
China
Hungary
Singapore
Poland (solved by Princess Sassi)
Reference: page33 lesson14
In Poland, the transitional upheaval and lack of reform has led to a thriving black market.
The most important characteristic of a successful business website is:
Speed
Innovation
Graphics
Products
Which of the following areas are preferred by women entrepreneurs?
Administration
Utilities
Manufacturing
None of the above
Reference:
page 11 lesson 29
Occupations
Both groups tend to have experience in the field of their ventures. Men more often have experience in manufacturing, finance, or technical areas. Most women usually have administrative experience, often in service-related fields.
The level at which an individual is viewed by society is called:
Financial status
Qualification
Social status
Achievement
Reference
Lesson 11
Social status: The level at which an individual is viewed by society
Conflicts in Management thoughts and Entrepreneur thoughts are resolved by which of the following company?
► Xerox
► Unilever
► Walls
► Volta
Lesson 5
Intrapreneurship is one method for stimulating and capitalizing on those who think that something can be done differently and better, such as Xerox Corporation’s commitment to Xerox Technology Ventures. It is important to instill the intrapreneurial spirit in an organization in order to innovate and grow. In a large organization problems occur that thwart creativity and innovation. This growth and diversity that can result are critical, since large corporations are more efficient in a competitive market than are smaller firms.
Which of the following shows the characteristic of line of credit?
Less commonly used
Involvement of commitment fee (Solved by Emman)
Can be replaced with Long term loan
Better option for perishable inventory
Which one of the following can serve entrepreneur as a consultant of the business plan?
Lawyers
Accountants
Marketers
All of the given options
WHO SHOULD WRITE THE PLAN
The business plan should be prepared by the entrepreneur; however, he or she may consult many sources. Lawyers, accountants, marketing consultants, and engineers are useful supplemental sources. Other resources are the Small Business Administration, Service Core of Retired Executives, Small Business Development Centers, universities, friends, and relatives. To help determine whether to hire a consultant, the entrepreneur needs to make an objective assessment of his or her own skills.
Who elect the directors in corporation?
Low level Managers
Entrepreneur
Shareholders (Solved by Zubair)
Middle Level Managers
Which of the following is the most important factor for the entrepreneur, while starting a new venture, to make an assessment of business?
► Profit
► Risk
► Market
► Competitors
Before preparing the plan, the entrepreneur must evaluate the profitability of the venture through
the following:
1. Expected sales and expense figures for the first three years
2. Cash flow figures for the first three years
3. Current balance sheets and pro forma balance sheets for the next three years Determination of expected sales and expenses is based on the market information Gathered earlier.
Which of the following helps to prevent lack of cash?
► Financial plan (Solved by Emman)
► Cash flow
► Business plan
► Personal plan
Page # 75, Lecture # 30
Financial plan
The financial plan provides the short-term basis for budgeting and helps prevent a common problem-lack of cash.
Which of the following is NOT an important aspect of international success?
► Planning
► Diversification
► Reporting
► Control
Reference & Explanation:
page#26 lesson #11
Decentralization is scaled back and major strategic decisions are again centralized. To understand what is required for effective planning, reporting and control the entrepreneur should consider.
A set of reasons for engaging in a particular behavior, especially human behavior is
known as _____________.
Values
Vision
Entrepreneurship
Motivation
PAGE NO 25
Motivations
That causes people to do something
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