FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 5: Small Business, Entrepreneurship, and Franchises

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 71

Multiple Choice

Review LaterAdd Note

Review Later

Your friend, Shonta, started a graphic design firm about a year ago.The business has done well, but it needs a lot more equipment, computers, and employees to continue expanding.Shonta does not see any problem because she thinks she can easily get all the money she will need from her local bank.What advice might you give her?

A) She is right-the bank is likely to lend her as much as she needs because banks primarily focus on supporting small businesses.
B) She is crazy-banks do not lend money to small businesses but only to well- known, well-established organizations.
C) She should sell her business immediately before it fails because most small businesses fail during the first five years.
D) She should not accept any new clients so that she can end the need to add additional equipment and employees.
E) She should consider alternative sources of financing because banks provide only about one-fourth of the total capital to small businesses.

F) C) and D)
G) All of the above

Correct Answer

verified

Show Answer

Question 72

Multiple Choice

Review LaterAdd Note

Review Later

Steve Jobs and Steven Wozniak, the founders of Apple Computer, Inc., are creative, free-spirited individuals who decided that being corporate underlings was not what they wanted from a career.They had an innovative idea for a product and desired to create their own business based on this idea.All of the following are factors that could have led them to go into business except

A) their independence.
B) the willingness to find and accept a challenge.
C) the desire to determine their own destiny.
D) the low risk and high rewards inherent in entrepreneurship.
E) entrepreneurial spirit.

F) A) and E)
G) All of the above

Correct Answer

verified

Show Answer

Question 73

Short Answer

Review LaterAdd Note

Why do certain industries tend to be more attractive for small business start-ups?

Mc-King Chicken Brian decided to open a local franchise of the well-known Mc-King Chicken, a fast-food restaurant.Before he took the initiative to open the franchise, he tried to weigh all the advantages and disadvantages.He decided, based on his research and understanding, that it would be beneficial to open a local fast-food restaurant. Mc-King has become quite successful domestically, and now it is exploring the possibility of opening franchises internationally.The company hired an international agency to help it learn what to do and what not to do.After the agency met with the managers of Mc-King a few times, the Mc-King management decided they would go ahead with their decision to expand internationally. -Refer to Mc-King Chicken.When Brian opens the Mc-King Chicken restaurant in his town, he would be known as the _____.

Money invested in small firms with the potential to become very successful is known as venture capital.

Michael Tucker operates Tucker Farms in northern Illinois.Last year, his annual receipts were just under $750,000.According to the Small Business Administration, Tucker Farms is a _____.

Why is the failure rate lower for franchises than for independent businesses?

The purchaser of a franchise is called the franchisor.

Money that is invested in small and sometimes struggling firms that have the potential to become very successful is called _____.

The incidence of innovation among small-business workers is significantly higher than that among workers in large businesses.

What is a franchise? What are the major types of franchising arrangements?

You stop at a SUBWAY to get a sandwich for lunch and you notice that they now have TCBY yogurt.This is an example of a _____.

A small business is all of the following except

What are some industries that attract small businesses?

Few Americans take advantage of their freedom to start a business.

About one-third of franchised businesses fail during the first two years of operation.

Which statement best characterizes the relationship between franchisor and franchisee in recent years?

A new business is built around the entrepreneur.

Is franchising a guarantee of success? Explain.

One reason small businesses fail is that their research and development investments are less productive than those of the largest firms.