Name: Justin Edelstein Utica College Test 2

_____________________________________________________Dr.Vennero MULTIPLE CHOICE

1. Which of the following questions concerning innovation is not relevant? a. What is the problem? b. Whom does it affect? c. What costs are involved? d. When should the product goes to market? 2. Which of the following statements is true? a. Innovation is the specific function of entrepreneurship. b. Innovation is the process by which entrepreneurs consume marketable ideas. c. Innovation does not involve change. d. Innovation is the governments responsibility. 3. Which of the following are keys to understanding opportunity and its development for entrepreneurs? a. creativity and capital b. innovation and creativity c. background and knowledge d. incubation and experience 4. Entrepreneurs sense potential in business problems by asking a. who is to blame for failures? b. what about profits? c. what if and why not? d. farfetched, unimaginative questions 5. The two most important aspects of creativity are a. design and solution. b. intelligence and technical competence. c. process and people. d. capital and opportunity. 6. Which of the following statements is true? a. People are born with creativity and can do nothing to change their level of creativity. b. People can learn to be creative. c. Creativity has nothing to do with learning. d. The creative mind cannot be developed. 7. One way to develop a creative mind is to a. read a variety of textbooks on entrepreneurship. b. be lucky enough to have musical parents. c. observe other entrepreneurs. d. pretend you are already creative. 8. The incubation process involves which of the following? a. working harder b. letting the subconscious work c. talking with friends d. changing jobs

9. Which of the following statements is true? a. The right brain helps people analyze and verbalize. b. The right brain helps people understand analogies and imagine things. c. The left brain helps people understand analogies and imagine things. d. Right and left brain concepts are meaningless. 10. Which of the following can help speed up the idea process? a. working harder b. seeing new movies c. taking breaks while working d. intuition 11. Which of the following can help entrepreneurs carry out the evaluation and implementation stage? a. increasing energy level b. hide your ideas from knowledgeable people c. avoid advice from others d. ignore hunches and feelings 12. A person can develop their own creativity by a. quitting a boring job. b. focusing on making money. c. taking up a new hobby. d. seeing new and different relationships in people, objects, and places around them. 13. Which of the following is a characteristic of creative people? a. bright but not necessarily brilliant b. poor image of themselves c. rigid and dogmatic d. unmotivated by challenging problems 14. Which of the following statements is true? a. The right brain is more important in the creative process than the left brain. b. The left brain is more important in the creative process than the right brain. c. Both sides of the brain are important to the creative process. d. Motivation, not the brain is the key to the creative process. 15. Which of the following mental habits inhibit creativity and innovation? a. either/or thinking, stereotyping b. functional perspective, mind-sets c. security hunting, risks d. stereotyping, incubation 16. Security hunting means a. using probability and stereotypes to minimize risk b. finding a permanent source of venture capital c. sticking firmly to decisions d. installing a security system 17. Which of the following statements is not true? a. Creative ideas never come out of the blue.

b. Ideas often emerge during activities unrelated to the enterprise. c. Answers usually come to an individual incrementally. d. Creative individuals allow their subconscious to mull over information. 18. Which of the following is not one of the phases in the creative process? a. background or knowledge accumulation b. evaluation and implementation c. the incubation process d. preliminary investigation 19. In the incubation process, ways of getting away from a problem include a. working harder b. working on something else. c. going to parties. d. visiting the library. 20. Successful entrepreneurs are able to identify and implement a. those ideas that are workable and that they have the skills to implement. b. those ideas that will make money. c. those ideas that are least feasible. d. those ideas that will win instant approval from customers. 21. Independence and autonomy are the major driving forces behind which of the following types of ventures? a. small unprofitable ventures b. corporate ventures c. lifestyle ventures d. high-growth ventures 22. The type of venture that is expected to attract venture capital would most likely be a a. corporate venture. b. high-growth venture. c. lifestyle venture. d. smaller venture. 23. What is a critical consideration when assessing customer availability? a. amount of products sold b. length of time needed to determine who the customers are and what their buying habits are c. the exact profitability of the venture d. all of the above 24. Which of the following as a factor contributing to new-venture failure? a. product/market problems. b. family issues. c. personality clashes. d. good management/poor product. 25. One of the external problems new ventures face is a. vandalism b. poor labor force

c. government regulations d. market knowledge 26. In recent studies of new venture problems, dominant problems at start-up were related to: a. regulatory environment b. sales/marketing c. production/operations d. none of the above 27. In recent studies of new venture problems, dominant problems during the growth stage were related to a. sales/marketing b. organization design c. regulatory environment d. none of the above 28. Using the failure prediction model discussed in the chapter, the risk of failure can be reduced by: a. using less debt as initial financing and generating revenue in the initial stages. b. using more debt as initial financing and generating less revenue in the initial stages. c. using more revenue to enhance more debt in the initial stage. d. all of the above. 29. Which of the following is a major reason for the failure of a new venture? a. inadequate market knowledge b. good product performance c. opening in the wrong location d. good product/poor marketing 30. Product/market problems include which of the following? a. venture capital relationship problems b. unclear business definition c. concept of a team approach d. assuming debt too early 31. Hiring and promotions on the basis of nepotism rather than qualification fall under the managerial problem of a. human resource problem. b. the concept of a team approach. c. unclear business definition. d. poor management. 32. A common human resource problem is a. poor relationships with parent companies and venture capitalists. b. incompetent support professionals. c. inflated owner ego. d. incompetent workforce. 33. Rapid technological advances in many industries cause a concern for a. faulty product performance b. rapid product obsolescence c. inadequate awareness of competitive pressures in new venture development.

d. undercapitalization 34. When premature entry into the marketplace causes the failure of a new venture, it can be termed a. poor timing. b. undercapitalization. c. a design problem. d. a distribution problem. 35. A solid analysis is a. a critical task in starting a new business. b. of no importance. c. no way to discover flaws in a new-venture idea. d. both a and c. 36. Which of the following are key questions to ask when screening an idea? a. Is it proprietary? b. Can it easily make money? c. What are its points of discussion? d. All of the above are correct. 37. The results of a profile analysis enable the entrepreneur to judge a. himself or herself. b. the competition. c. the potential of the business. d. venture capital opportunities. 38. A checklist approach allows the entrepreneur to identify major strengths and weaknesses in of a new venture. a. the financial b. the marketing c. the organizational d. all of the above 39. Failure of a new venture can be avoided a. by being a high-risk taker. b. through a careful profile analysis. c. through both a and c. d. through none of the above. 40. In determining the potential market, one should look _____ into the future. a. one year b. three to five years c. ten years d. three months 41. Which is not a key question to ask when buying a business? a. Why is the business being sold? b. Is the building heated with gas or electricity? c. What is the condition of the inventory? d. How many of the employees will remain? factors

ANS: B

PTS: 1

NAT: AACSB Reflective Thinking | Strategy

42. The _____ approach indicates the importance of peoples awareness of their daily lives for developing new business ideas. a. new-new b. old-old c. old-new d. new-old 43. Which of the following is not currently cited as a trend creating business opportunities? a. green products b. breakfast cereals c. health care d. concierge services 44. What is the largest source for new business ideas among men? a. Chance b. Prior job c. Hobby d. Education courses 45. What is the largest source of new business ideas among women? a. Prior job b. Hobby c. Education courses d. Chance 46. What is an often overlooked asset when acquiring a new business? a. Records b. Buildings c. Equipment d. None of the above 47. An analysis of the competition should look for ______. a. opportunities. b. weaknesses. c. unscrupulous practices. d. None of the above 48. Who must negotiate a final deal to purchase a business? a. A lawyer b. A CPA c. The potential buyer d. All of the above 49. When is the buyer likely to have power over the seller in the negotiation to purchase a business? a. if the seller has already purchased another business b. if potential buyers are numerous c. if the buyers backers wish to invest quickly d. if the seller has no deadline for selling

50. When does a business have to increase its sales annually to net as much as it did in the previous year? a. when profits are rising as fast as sales b. when profits are not rising as fast as sales c. when sales are trending upward d. both a and c SHORT ANSWER 51. Briefly explain the new-old approach to creating new ventures. The new-old approach is Piggy backing on someone elses idea by either improving a product or offering a service in an area in which it is not currently available. 52. What is the role of business brokers in acquiring an established entrepreneurial venture? The role of business brokers in acquiring an established entrepreneurial venture is assisting buyers and in the buying process. They typically estimate the value of the business; handle the initial potential buyer interviews, discussions, and negotiations with the prospective sellers; assist the progress and generally help with the business sale. 53. Why did the Federal Trade Commission enact the Franchise Rule? The Federal Trade Commission published the Franchise Rule to help informed decisions and to prevent deception in the sale of franchises by requiring franchisors to provide potential franchisees with material information prior to the sale. 54. What are the major types and uses of debt financing? -Term Loan- A monetary loan that is repaid in regular payments over a set period of time and are usually used to finance particular assets, such as building renovations or capital equipment. -Lines on Credit- Your business has a set amount of credit that you can draw upon. While a line of credit gives you the flexibility to pay day-to-day expenses or meet cash flow crises, whatever amount of money you use has to be paid back, and you pay interest on the outstanding balance. - Credit Cards- (especially designed for small businesses) Are a popular way for small businesses to finance startup and operating expenses. 55. What is the potential future of social lending with respect to entrepreneurs? The potential future of social lending with respect to entrepreneurs is Peer-to-peer lending. Peerto-peer lending is the practice of lending money to unrelated individuals, or "peers", without going through a traditional financial intermediary such as a bank or other traditional financial institution. This lending takes place online on peer-to-peer lending companies' websites using various different lending platforms and credit checking tools. 56. How does a public offering differ from a private placement?

Private Placement is a funding round of securities which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors. Public offering is the offering of securities of a company or a similar corporation to the public. Generally, the securities are to be listed on a stock exchange. 57. As the venture capital market has experienced rapid growth, several market trends have emerged. What are the major trends of today? Banks loans, Credit Cards, Term Loans 58. Should entrepreneurs accept proposals from the first venture capitalist that offers? Yes, if the money is right. No, if you think the proposal could be higher. 59. Are formal firms the only source of venture capital? No 60. Define a patent and describe its limitations. A Patent is a set of exclusive rights granted by a sovereign state to an inventor or their assignee for a limited period of time, in exchange for the public disclosure of the invention. 61. What does a copyright protect? A Copyright is a legal concept, enacted by most governments, giving the creator of an original idea or work exclusive rights to it, usually for a limited time. Generally, it is "the right to copy", but also gives the copyright holder the right to be credited for the work, to determine who may adapt the work to other forms, who may perform the work, who may financially benefit from it, and other related rights. 62. What are the uses of trademarks and how can they be invalidated? A trademark is a recognizable sign, design or expression which identifies products or services of a particular source from those of others. The trademark owner can be an individual, business organization, or any legal entity. A trademark may be located on a package, a label, a voucher or on the product itself. 63. What are the rules for avoiding pitfalls in selecting trademarks? Consult with a trademark attorney, trademark search, domain name availability, register your trademark. 64. Identify the three major sections of the Bankruptcy Act. The United Stated, Hong Kong, and The United Kingdom.