1. The return on the owner’s investment (equity) is a better measure of performance than (Points: 4)
A. The return on assets ratio.
B. The current ratio.
C. The quick ratio.
D. The absolute dollar amount of income.
2. Drawbacks of selling stock as a source of funds include (Points: 4)
A. Enhanced corporate image.
B. Loss of voting control of the company.
C. Future financing.
D. Estate planning.
3. One of the factors that influences the choice between debt and equity is the (Points: 4)
A. Returns anticipated from the enterprise.
B. Risk of nationalization.
C. Degree of control the owners hope to retain.
D. State of the owners' estate plan.
4. A build-up leveraged buyout involves (Points: 4)
A. Developing the business to make it an attractive takeover target.
B. Acquiring businesses that occupy a higher level in the market channel.
C. A longer time horizon than a bust-up leveraged buyout.
D. Constructing a larger enterprise to be taken public via an IPO.
5. Harvesting owners generally prefer ____ over ____. (Points: 4)
A. Cash, stock
B. Debt, equity
C. Equity, debt
D. Stock, cash
6. The most common way that entrepreneurs accomplish more with less is called (Points: 4)
C. Debt financing
D. Credit card financing
7. For every dollar of assets there must be a corresponding dollar of (Points: 4)
8. Will’s business will not be successful unless it charges a price for its products that covers its (Points: 4)
A. Total variable cost.
B. Total cost.
C. Total fixed cost.
D. Total cost and some margin of profit.
9. Which of the following is true with respect to revolving charge accounts? (Points: 4)
A. A down payment is normally required.
B. Charged purchases may not exceed the credit limit.
C. A fixed amount must be paid monthly, regardless of the outstanding balance.
D. Finance charges increase as the outstanding balance increases.
10. A trade credit bill of $80,000 with terms of sale of 2/5, net 30 means the buyer saves ____ if the bill is paid within the discount period. (Points: 4)
11. Mini Makers, a small manufacturer of action figures, is formulating a budget for next year's promotional activities. The company decides to budget $50,000 for promotional expenses (an amount equal to its nearest competitor's allotment.) Mini Makers is using the ____ method of budgeting. (Points: 4)
A. Spending as much as the competition
B. What it will take to do the job
C. Percentage of sales
D. What can be spared
12. An example of a non-financial reward that may motivate a salesperson is (Points: 4)
A. Personal recognition.
C. A bonus plan.
D. A stock plan.
13. Specialties are promotional tools that can (Points: 4)
A. Create goodwill for the company.
B. Prevent price competition.
C. Allow customers to sample the product.
D. Cast doubt on the products offered by competitors.
14. When a business locates a production facility or sales office overseas by purchasing a foreign business from another firm, this is referred to as a ______. (Points: 4)
A. Greenfield venture
D. Cross-border acquisition
15. When it comes to expanding the market, an emerging motivation for going global is to (Points: 4)
A. Take advantage of unique features of the local market.
B. Find buyers for highly specialized products.
C. Obtain tariff reductions.
D. Extend the product life cycle.
16. Considering the nature of its products, a cement fabricator that specializes in the manufacture of bird baths is likely to go global to (Points: 4)
A. Gain access to critical raw materials.
B. Capitalize on special features of location.
C. Obtain specialized human resources.
D. Cut costs.
17. When a small business forges an agreement with a bank that consents to honor a draft or other demand for payment after goods are delivered internationally, the firm receives a (Points: 4)
A. International invoice.
B. Bill of lading.
C. Letter of confirmation.
D. Letter of credit.
18. The founder of a firm is most likely to be described as a (Points: 4)
A. Creative person.
B. Good manager.
C. Low risk taker.
D. Good organization member.
19. The Americans with Disabilities Act requires employers to make ____ adaptations to facilitate the employment of individuals protected by the act. (Points: 4)
20. In establishing a management training program, employees should be consider all of the following factors except (Points: 4)
A. The need for training.
B. A plan for training.
C. The timetable for training.
D. The design of the training facilities.
21. Which of the following plays the central role in attracting and motivating employees? (Points: 4)
A. Flexible work duties
B. Job sharing arrangements
D. Vacation benefits
22. One of the essential elements of successful quality management is (Points: 4)
A. Customer focus.
B. A supportive organizational structure.
C. Appropriate expectations.
D. A stable management team.
23. A control chart is used as part of a (Points: 4)
A. Statistical process control plan.
B. 100 percent inspection plan.
C. Traditional inspection plan
D. Re-engineering plan.
24. Traditionally, commercial property insurance has valved all property loss at (Points : 4)
A. The depreciated value of the damaged or lost property.
B. The un-depreciated value of the damaged or lost property
C. The actual cash value of the damaged or lost property
D. The purchase value of the damaged or lost property
25. Which of the following accounting methods/systems recognizes revenue and expenses only when cash is received or payment is made? (Points : 4)
A. Single-entry system
B. Double-entry system
C. Accrual method
D. Cash method