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Study Resources (Business Management)

  21) Which of the following generally is not required by a Certificate of Incorporation? A) The names and the addresses of the incorporators B) A statement of the corporation's purpose C) A statement of how stock proceeds will be used D) The corporation's bylaws 22) Which of the following statement(s) is/are true? A) Closely held corporations.
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  46) If a sole proprietor dies, retires, or becomes incapacitated, the business automatically terminates. 47) The most common form of business ownership in the United States is the partnership. 48) Although not required by law, a written partnership agreement that spells out the terms of operating the partnership and the status of.
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  124) Briefly describe the advantages and the disadvantages of buying an existing business. 125) Briefly discuss the five steps in acquiring a business. 1.Analyze your skills, abilities, and interests to determine what kind(s) of businesses you should consider.  Think about what you expect to get out of a business, what size company.
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  1) A franchise is a system of distribution in which semi-independent business owners pay ________ and ________ to a parent company in return for the right to become identified with its trademark, to sell its product or services, and often to use its business format and system. A) a percentage of.
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  99) What is an S corporation?  Explain the advantages and the disadvantages of an S corporation. 100) What kinds of companies would benefit most from S corporation status?  Least? 101) What is a limited liability company?  How is one formed?  What benefits does an LLC offer? 102) Compare and contrast the following forms.
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  42) The ________ approach to valuing a business assumes that a dollar earned in the future is worth less than that same dollar is today. A) balance sheet B) capitalized earnings C) adjusted balance sheet D) discounted future earnings 43) Which of the following valuation techniques is best suited for determining the value of service.
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  21) Which of the following is not a secondary source of market research data? A) Census data B) Trade publications C) Focus groups D) Magazines 22) Which of the following features allows a small company to utilize relationship marketing successfully? A) Close contact with its customers B) Personal attention to its customers C) Emphasis on superior service for.
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  11) Studies of shifting patterns in age, income, education, race, and other population characteristics are the subject of: A) psychographics. B) demographics. C) sociographics. D) paleontology. 12) Tracking ________ patterns can enable entrepreneurs to adjust their strategies accordingly to better position them to take advantage of the opportunities these trends may create. A) population B) demographic C) weather D).
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  50) If a franchiser encourages you to sign without reading the agreement, or discourages you from "spending the money on an attorney," this is a warning sign that the franchiser might be dishonest. 51) The franchisee turnover rate is the rate at which franchisees leave a franchise system. 52) A good method.
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  96) When an entrepreneur purchases an existing business, he or she essentially is purchasing its future profit potential. 97) The balance sheet technique is one of the most commonly used methods of evaluating an existing business, although it oversimplifies the valuation process because it values a company only on the basis.
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  75) The increasing diversity of our population is creating a marketing "threat" to small businesses because they cannot profitably serve small niches. 76) Small companies that spot demographic trends and act on them early can gain a distinctive edge in the market. 77) Demographics is the study of important population characteristic such.
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  105) A survey by the National Federation of Independent Businesses reports that 78 percent of small business owners believe that adding innovative products and services is important to their companies' success. 106) Because a majority of the average company's sales come from present customers, few can afford to alienate any customers. 107).
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  21) A study by the International Franchises Association reports that minorities own more than ________ percent of all franchises and women own ________ percent of franchises. A) 2;8 B) 9;20 C) 12.;25 D) 19;25 22) ________ is an emerging international market for U.S. franchisers that is expected to realize the highest future growth rate. A) Europe B).
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  Mini-Case 6-1: Pipe Dreams   Ralph Emerson thought he'd been a librarian long enough, and when the opportunity arose to open a small tobacco, pipe, and cigar shop in the newly renovated downtown business district, he was ready to act. Pipe Dreams is a franchiser of smoke shops, and was founded eight.
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  21) A toy manufacturer is sued based on the claim of injuries caused by a product it makes.  This is an example of a: A) product liability lawsuit. B) promissory estoppel lawsuit. C) restrictive covenant lawsuit. D) contingent liability lawsuit. 22) When evaluating the financial position of a business he or she is considering buying,.
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  124) Why is it important for small business owners to define clearly their target market(s) as part of their marketing strategies? 125) Why is it important for small business owners to track demographic trends?  How can small companies become effective trend trackers? 126) Your friend Maria is experiencing declining sales in the.
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  36) Changing from one form of ownership to another once a business is up and running can be difficult, expensive, and complicated. 37) Some forms of ownership are much more costly and involved to create. 38) Entrepreneurs should not spend much time selecting a form of ownership for their businesses because making.
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  11) A recent study reports that the success rate of franchisees increases when a franchise system: A) requires franchisees to have prior industry experience. B) requires franchisees to actively manage their operations. C) has built a strong brand name with training programs to improve knowledge and skills. D) All of the above increase the.
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  66) The hidden market of companies  -- those companies that might be for sale and are not advertised?is one of the richest sources of top -- quality businesses to purchase. 67) Financing the purchase of an existing business usually is easier than financing the startup of a new one. 68) The process.
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  1) ________ is the process of creating and delivering desired goods and services to customers and involves all of the activities associated with winning and retaining loyal customers. A) Marketing B) Personal selling C) Promotion D) Customer service 2) For an entrepreneur, a business plan: A) is of relatively little importance due to the dynamic nature.
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  127) Describe what is meant by guerrilla marketing.  What objectives should a guerrilla marketing plan accomplish?  List at least five guerrilla marketing tactics your small business might be able to use successfully. The marketing plan has four objectives that include: 1.  Pinpoint the specific target market the small company will serve. 2.  Determine.
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  129) Explain the concept of total quality management.  How is it different from the quality inspection of a final product just before being packaged? 130) Why is it important for a small business to keep existing customers satisfied?  How can a company achieve such customer satisfaction? 131) What marketing potential does the.
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  126) Your friend Susan is considering purchasing an existing business.  How would you explain to her what due diligence is, why it is important, and the critical areas of it? 1.Why does the owner really want to sell the business?  His stated reason may not be the real one.  Is he.
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  61) What are some indicators that a potential franchisee might be dealing with a dishonest franchise?  What steps can a potential franchisee take to avoid becoming a victim of a dishonest franchise? 62) Explain the following franchise concepts and give an example of each: multiple-unit franchising, intercept marketing, conversion franchising, and.
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  66) A master limited partnership (MLP) is like a regular limited partnership, except that its shares are not traded. 67) A corporation formed and chartered in Kansas is considered a domestic corporation when doing business in Kansas, and a foreign corporation when doing business in Missouri. 68) A corporation formed in Taiwan.
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  30) A franchise is an arrangement in which semi-independent business owners pay fees and royalties to a parent company in return for the right to sell its products or services and often to use its business format and system. 31) Pure franchising involves the right to use all the elements of.
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  Mini-Case 8-1: Customers: Key to Success   Lloyd Dixon has owned and operated a small dress shop for the past three years. Each fashion season, Lloyd attends the apparel shows and he is always very impressed by the glamour and the hundreds of different manufacturers, all with the merchandise that they say.
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  11) In a partnership, the ________ partner(s) has (have) unlimited liability for the partnership's debts. A) limited B) dormant C) nominal D) general 12) In a general partnership: A) each partner is held responsible for an agreement/decision made by any one of the partners. B) partners can be held responsible only for decisions they make personally. C) no.
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  57) Define franchising.  Explain the three types of franchising.  Which is the fastest-growing segment? 1.Tradename 2.Product distribution 3.Pure (business format) 58) Outline the benefits and drawbacks of buying a franchise. 59) What is the Franchise Disclosure Document?  How can this document be of value to a potential franchisee? 60) Outline the recommended procedure for buying a.
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  96) John and Bill are considering starting a partnership.  Why is it important for them to develop a formal partnership agreement?  List at least ten of the provisions their partnership agreement should include. 1.Name of partnership 2.Purpose of business 3.Domicile of the business 4.Duration 5.Partner names and addresses 6.Contributions of each partner 7.How profits/losses are distributed 8.Agreement on.
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  Mini-Case 7-1: What's It Worth?   Lauren Holcombe has wanted to open her own clothing store since she was in high school. Her career interest and dynamic personality enabled her to get a part-time job at a small women's clothing shop in her hometown after school. When Lauren enrolled in the state.
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  Use the following information to answer the questions below.   Baubles and Bells, a small business, is up for sale. The book value of its assets is $397,650, and its liabilities have a book value of $148,500. After adjusting for market value, total assets are worth $386,475, and total liabilities are $153,600..
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  115) Profits generally are low, or even negative, in the introductory stage of the product life cycle. 116) Sales and profits peak in the growth stage of the product life cycle. 117) When products reach the decline stage of the product life cycle, they fail and become extinct. 118) In the maturity stage.
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  95) Since front-line service workers are not able to predict the causes of customer complaints, managers must be the ones to identify potential customer service problems. 96) When an employee in a business treats a customer poorly, that customer usually does not complain; however, she does tell her "horror story" about.
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  31) A limited liability company is most like a(n): A) general partnership. B) master partnership. C) sole proprietorship. D) S corporation. 32) Which of the following documents must an entrepreneur file to create a limited liability company? A) The articles of organization B) The articles of incorporation C) The operating agreement D) A and C only 33) Which of the.
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  11) Perhaps the ideal source of financing the purchase of an existing business is: A) a venture capitalist. B) the Small Business Administration. C) the seller of the business. D) an insurance company. 12) To ensure a smooth transition when buying an existing business, a buyer should: A) communicate with employees to reduce their uncertainty and.
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  129) Is there a "best method" for determining the value of a business?  Why?  How should a prospective buyer go about establishing the value of a business? 130) Briefly summarize the mechanics of each of the methods for valuing an existing business: balance sheet technique, adjusted balance sheet technique, excess earnings.
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  86) Many business owners show low profits in their businesses intentionally to lower their tax bills. 87) Because so many business owners take money from their companies' sales without reporting it as income, a business buyer should expect to pay for undocumented, "phantom" profits when buying an existing business. 88) The practice.
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