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Basic Business Planning MCQ

1. The way you want to spend your time, money, and resources in the future are your _____.

Interests

Lifestyle goals

Aptitudes

Values

Answer

Correct Answer: Lifestyle goals

Note: This Question is unanswered, help us to find answer for this one

2. Customer share is sometimes referred to as _____.

Wallet

Stock

Cost

Distribution

Equity

Answer

Correct Answer: Wallet

Note: This Question is unanswered, help us to find answer for this one

3. What is a way to segment the market?

By their looks

By their geographical location

By their dreams

By their library status

Answer

Correct Answer: By their geographical location

Note: This Question is unanswered, help us to find answer for this one

4. What is a value chain?

The sequence of activities a business takes to add value to its products and services

A list of questions directed at past clients

An award given to industry leaders

A marketing strategy

Answer

Correct Answer: The sequence of activities a business takes to add value to its products and services

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5. Why should a business plan be revisited annually?

To make sure the company gets its money's worth out of the business plan cost

Because the company's values, objectives, strategies and forecasts keep changing

It is required by law

It helps the management to look intelligent to the employees

Answer

Correct Answer: Because the company's values, objectives, strategies and forecasts keep changing

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6. What is meant by Mass Marketing?

Sending coupons to prior customers

Sending a newsletter to everyone who signed up to receive it

Posting an ad on a site related to your businesses industry

Marketing to a broad range of people, hoping to capture your specific market and possibly introduce others, not in your target market, to your products

Answer

Correct Answer: Marketing to a broad range of people, hoping to capture your specific market and possibly introduce others, not in your target market, to your products

Note: This Question is unanswered, help us to find answer for this one

7. Why would a company with a very rigid business plan possibly face trouble?

Competitors will more easily mimic their business model

They will run out of money quicker

The management will not stay with the company

It will be unable to change as the market changes

Answer

Correct Answer: It will be unable to change as the market changes

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8. Why is it important to identify your market segments?

It is required by law

The company will fail without the information

It is required for budgeting

You need to tailor your marketing strategy and products to each market segment differently

Answer

Correct Answer: You need to tailor your marketing strategy and products to each market segment differently

Note: This Question is unanswered, help us to find answer for this one

9. Why is it okay to let some competitors' moves go unanswered?

Companies should focus on their own initiatives rather that constantly respond to other companies actions

Let the competitors succeed or fail first before responding to their moves

It is better to be a follower and always follow the competition

Competitors always make stupid decisions

Answer

Correct Answer: Companies should focus on their own initiatives rather that constantly respond to other companies actions

Note: This Question is unanswered, help us to find answer for this one

10. What is an advantage of making a competitor analysis?

It is required by law

It fills out sections of the business plan so it looks impressive

It find weaknesses in competitors business models and exploit them

It can lead to lower tax obligations

Answer

Correct Answer: It find weaknesses in competitors business models and exploit them

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11. Which of the following would you factor into long term liabilities?

Loans the company has to take

Interest rates

Current depreciation rates

Revenue projections

Answer

Correct Answer: Loans the company has to take

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12. How far into the future should revenue be projected in a business plan?

2 years

6 months

1 year

5 years

Answer

Correct Answer: 5 years

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13. What would be the best methodology to follow while creating a forecast?

Be conservative

Be extravagant

Base it on a competitor's

Copy someone else's so you don't have to take any pains

Answer

Correct Answer: Be conservative

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14. What is meant by vertical integration?

A product sold to marketing firms

Being involved in many stages of the industry

Focusing on one aspect of your industry

Using new age software

Answer

Correct Answer: Being involved in many stages of the industry

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15. What type of company would never need a business plan?

A hockey equipment manufacturer

A new online service based company

A shoe retailer

None of the above

Answer

Correct Answer: None of the above

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16. Which of the following terms best describes how a company can make itself stand out from the competitors?

Differentiation

Marketing

Doing a business plan

Stealing employees

Answer

Correct Answer: Differentiation

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17. Which of the following could be a core competency of a company?

No marketing plan in place

Ability to change direction quickly

High labor burden rates

Inexperienced management team

Answer

Correct Answer: Ability to change direction quickly

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18. What role does marketing play in a company's business life?

It creates a tax obligation

It is how it makes potential customers aware of its products and services

It is part of the ordering process

It is part of the financial reporting process

Answer

Correct Answer: It is how it makes potential customers aware of its products and services

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19. What is a business model?

A marketing plan

A financial plan

A description of what your company does and how it makes money by doing it

A mini model of the company's headquarters

Answer

Correct Answer: A description of what your company does and how it makes money by doing it

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20. Which of the following is a traditional method of marketing?

Pay Per Click

Television advertisements

Search Engine Optimization

None of the above

Answer

Correct Answer: Television advertisements

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21. What is meant by "market segments"?

Different areas of the market

Different categories of customers

Different ways to reach the customer

The various product lines of the company

Answer

Correct Answer: Different categories of customers

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22. What is one of the ways to establish who your competitors are?

Conduct a survey

Ask the government

Pay a detective firm to find out

Determine your customer base and look at their alternatives

Answer

Correct Answer: Determine your customer base and look at their alternatives

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23. What is the DuPont formula?

The basic balance sheet formula

The basic P&L formula

A formula to show how cash flow is calculated

A formula created by the DuPont company to help capture all the ingredients of Return on Equity

Answer

Correct Answer: A formula created by the DuPont company to help capture all the ingredients of Return on Equity

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24. Which of the items below is NOT a purpose of a business plan?

Informing potential investors of the company's business model

Offering shares of the company for sale

Letting the employees know the purpose of the business

Helping the management by providing them with a road map

Answer

Correct Answer: Offering shares of the company for sale

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25. What is one of the reasons for the failure of companies?

Their product sells too well

They fail to make a marketing plan

Lack of long term vision and planning

The management is over qualified

Answer

Correct Answer: Lack of long term vision and planning

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26. What should be considered while deciding a firm's strategy?

The competitors and the strategy they have employed

How much the company wants to spend on payroll

If there is a potential for a lawsuit

None of the above

Answer

Correct Answer: The competitors and the strategy they have employed

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27. What section would SWOT analysis typically be in?

Financial Highlights

Executive Summary

Business Model

Market

Answer

Correct Answer: Market

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28. Where would company valuation be discussed?

Market

Marketing

Financial section

Executive Summary

Answer

Correct Answer: Financial section

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29. Why would a new company spend most of their budget on marketing?

Investors want to see their money spent on marketing

There is nothing else to spend the money on in the early stages

It is a requirement of SEC for new companies

To establish a client base early on

Answer

Correct Answer: To establish a client base early on

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30. Which of the following is one of the groups a business plan is meant to inform?

The SEC

Government entities

Potential investors

The IRS

Answer

Correct Answer: Potential investors

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31. What marketing method is a gas station most likely to use?

Door to door sales

Online advertisements

Television ads

Coupons distributed locally to the residents

Answer

Correct Answer: Coupons distributed locally to the residents

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32. Why is it important to talk about competition?

It is not important; competition should be ignored

You want to compliment them in your plan so they like you and your company

They can sue you if you ignore that they exist and lie to the reader

Everyone has competition. It is best to address the competition and plan how your firm will stack up against it

Answer

Correct Answer: Everyone has competition. It is best to address the competition and plan how your firm will stack up against it

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33. Why is it important to have an executive summary?

It is required by law

It urges the reader to read the entire plan to learn more

It gives the reader a quick 1 to 2 page summary of the entire business plan without having to read the whole document

It can be used to sell the shares of the company

Answer

Correct Answer: It gives the reader a quick 1 to 2 page summary of the entire business plan without having to read the whole document

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34. What is one of the criteria that a flower delivery company could distinguish itself by on the market?

Charging more

Timeliness of the deliveries

Their delivery people are all over age 45

They have the latest cash register on the market

Answer

Correct Answer: Timeliness of the deliveries

Note: This Question is unanswered, help us to find answer for this one

35. What is Blockbuster Videos business model?

It sells candies

It hires unemployed war veterans

It sells high quality goods at discounted prices

It rents dvds for a fee

Answer

Correct Answer: It rents dvds for a fee

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36. How is "distribution and delivery" defined?

How a company receives its inventory

How a customer pays for its product

How a customer learns about its product

How a customer actually receives its product

Answer

Correct Answer: How a customer actually receives its product

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37. What is one of the ways to track your competitors?

To keep track of publicly available financial statements

Ask your employees to spy on them

Bribe one of their employees

Assume they do better than you

Answer

Correct Answer: To keep track of publicly available financial statements

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38. What should a company do if they do not have a marketing plan?

Omit the marketing section completely

Leave the section blank or write N/A

Determine the company's marketing plans and realize every company needs some form of marketing

Copy someone else's marketing plan

Answer

Correct Answer: Determine the company's marketing plans and realize every company needs some form of marketing

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39. Why would a company's website be considered a part of its marketing effort?

It is a way to reach out to current and potential customers with information about its product and its value proposition

It falls under the marketing budget

The web designer's salary falls under marketing

The company can offer coupons to customers by creating it

Answer

Correct Answer: It is a way to reach out to current and potential customers with information about its product and its value proposition

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40. What should be the minimum length of a business plan?

2 pages at the most

At least 50 pages

At least 100 pages

There are no predefined standards

Answer

Correct Answer: There are no predefined standards

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41. What policy should be followed regarding employees and the company strategy?

Never let employees know the strategy; they are there just to do their job and nothing more

Only let top executives know the company's strategy

Let everyone know the company strategy and how they will accomplish it

Require employees to sign a non disclosure before reading it

Answer

Correct Answer: Let everyone know the company strategy and how they will accomplish it

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42. What is the purpose of a what-if analysis?

It is required by law

It shows the preparer is intelligent

It shows the forecasted numbers under different scenarios, both good and bad

It shows what happens if the firm doesn't receive investment capital

Answer

Correct Answer: It shows the forecasted numbers under different scenarios, both good and bad

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43. What is meant by Market Demographics?

The number of people in the market

Age, gender, racial, educational, occupational, religious characteristics

The population of the country being marketed to

Buying trends of the market

Answer

Correct Answer: Age, gender, racial, educational, occupational, religious characteristics

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44. Which of the following strategies has warehouse reseller Costco taken?

High prices, selected goods

A strategy similar to that of a regular grocery store

Low priced items but a limited selection

A wide variety, low price, no frills shopping experience with a membership

Answer

Correct Answer: A wide variety, low price, no frills shopping experience with a membership

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45. Which of the following would not typically be a section in a business plan?

Executive Summary

Financial Projections

Market

Payroll Policies

Answer

Correct Answer: Payroll Policies

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46. What is meant by "top down" budgeting?

Starting with specific forecasts by department and then rolling them up

Starting with high level numbers and breaking down into subcategory amounts

Allowing several people to contribute to the budget

Budgeting for the next 10 years

Answer

Correct Answer: Starting with high level numbers and breaking down into subcategory amounts

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47. How could a video rental outlet stand out above their competitors in a positive way?

Guaranteeing availability of all videos

Charging more by claiming better quality

Having less staff and creating longer waiting time

Having fewer locations and thus making it exclusive

Answer

Correct Answer: Guaranteeing availability of all videos

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48. Why is it important to talk about market timing?

There are laws about entering a market in an off time

There are no preferred times to enter a market, it is irrelevant

While there is no good time to enter a market, it is important to discuss them

Several industries are cyclical and there are advantages in entering a market which is just beginning on an upswing

Answer

Correct Answer: Several industries are cyclical and there are advantages in entering a market which is just beginning on an upswing

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49. What is the purpose of a cash flow forecast?

To forecast the company's cash flow and also see if and when the company will ever run out of cash at all

To fulfill a legal requirement

To predict profit and loss

To show if the company can afford to take on investors

Answer

Correct Answer: To forecast the company's cash flow and also see if and when the company will ever run out of cash at all

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50. Which of the following would be a mistake in forecasting?

Using unrealistic expectations

Creating a detailed revenue projection

Creating a set of assumptions on which the forecast is built

Making a forecast for several years

Answer

Correct Answer: Using unrealistic expectations

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51. Where might a potential competitor come from?

An established company in a different industry could easily expand into your market

Any company in any industry is a threat

Some employees may leave and start their own companies

Some members of the management could leave and start their own company

Answer

Correct Answer: An established company in a different industry could easily expand into your market

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52. What best describes a differentiation strategy?

Emphasis on the unique benefits of the product or service

Focus on product pricing

Focus on marketing

None of the above

Answer

Correct Answer: Emphasis on the unique benefits of the product or service

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53. Why is it important to know the entire potential market even if your company can only focus on a small segment?

The total market dictates what the individual market size will be and what the maximum potential size is

It is needed for company financial reports

You can expand the company to reach the entire market

There is no real reason to know

Answer

Correct Answer: The total market dictates what the individual market size will be and what the maximum potential size is

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54. What are the minimum financial statements that should be included in a business plan?

Statement of Retained Earnings and P&L

Income Statement, Balance Sheet, Statement of Cash Flow

Only profit projections for five years

Cash Flow, Balance Sheet and Statement of Retained Earnings

Answer

Correct Answer: Income Statement, Balance Sheet, Statement of Cash Flow

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55. What would sending coupons to prior customers directly be considered?

Target Marketing

Mass Marketing

Radio Marketing

Coupon Forwarding Marketing

Answer

Correct Answer: Target Marketing

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56. In which section of a business plan would you talk about the CEO?

Management

Financial Projections

Market

SWOT

Answer

Correct Answer: Management

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57. What has been the trend in marketing in the last few decades?

Marketing to mass markets

Moving towards smaller marketing schemes, more direct to the customer

Spending less on marketing as it does not really reward the company

Getting away from the internet and spending more on television advertising

Answer

Correct Answer: Moving towards smaller marketing schemes, more direct to the customer

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58. How does a company assess the performance of its marketing efforts?

By looking at the total revenue and assuming part of it came from marketing

By dividing marketing expenses by revenue

By just assuming the more the company spends on marketing, the more it makes

By tracking where customers are coming from and weighing the cost of marketing against the number of customers and their spending

Answer

Correct Answer: By tracking where customers are coming from and weighing the cost of marketing against the number of customers and their spending

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59. What is a competitive advantage?

A feature which distinguishes your company from the others and will help it to achieve success

A listing of competitors

A marketing strategy

An advantage your competitors have over you

Answer

Correct Answer: A feature which distinguishes your company from the others and will help it to achieve success

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60. What is meant by Relationship Marketing?

Placing ads on the television

Going door to door to market the company

Sending out coupons to customers

The opposite of Mass Marketing — connecting with customers directly, one to one

Answer

Correct Answer: The opposite of Mass Marketing — connecting with customers directly, one to one

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61. Why are companies able to stay in business during turbulent financial market times?

They have saved up enough money; they can use these savings to bolster their earnings

They frequently lay off people thus running a bare bones company

They have designed a flexible business model that can adapt to change

They don't; most if not all companies go out of business

Answer

Correct Answer: They have designed a flexible business model that can adapt to change

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62. What is a characteristic of a market leader strategy?

Follows the strongest company in the industry

Goes out of business first

Copy cats other companies

Makes the first moves and distinguishes itself as the prominent player in the industry

Answer

Correct Answer: Makes the first moves and distinguishes itself as the prominent player in the industry

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63. What strategy should a new company wanting to enter a market employ?

Market to everyone on earth and see what happens

Look at the market leader and attempt to steal all of their clients

Spend every cent they can on online advertising

Focus on smaller, ignored territories to gain a foothold

Answer

Correct Answer: Focus on smaller, ignored territories to gain a foothold

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64. Where would the Financial Projections typically be located in a business plan?

In the middle of the plan

In the final section before the appendix

In the first section before the executive summary

In the section after the executive summary

Answer

Correct Answer: In the final section before the appendix

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65. Why is it important to track your competitors?

They might be indulging in illegal activities

You can steal their employees

To look for the moves they are making which could impact your business

You can steal their proprietary ideas

Answer

Correct Answer: To look for the moves they are making which could impact your business

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66. In which section of a business plan would the company's mission statement be located?

Business Model

Financial Projections

Market

Management

Answer

Correct Answer: Business Model

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67. What would a Market Follower strategy be distinguished by?

A company who attacks the market leader

A company who turns a few heads but does not challenge the market leader

A company on the verge of going out of business

A company who wants to enter new markets

Answer

Correct Answer: A company who turns a few heads but does not challenge the market leader

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68. What is the purpose of creating a valuation statement of the company?

It is required for financial statements

To work with investors and determine what percentage of equity to give away for investments

To entice private investors by giving them an unrealistic view of what the company is worth

The IRS will require it with the tax return

Answer

Correct Answer: To work with investors and determine what percentage of equity to give away for investments

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69. Why is it important to hire intelligently early on?

You can pay lower rates if you hire early on

It is easier to fire people who were hired early

There are tax benefits

Having key management people in place is important as they will aid in making important decisions early on

Answer

Correct Answer: Having key management people in place is important as they will aid in making important decisions early on

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70. How might a company learn more about its market and what drives the customers to purchase their product?

Contact focus groups and gain valuable information directly from the customers

Make assumptions and go with them

Ask the competitors and assume it's the same for your company

There is no way to find out

Answer

Correct Answer: Contact focus groups and gain valuable information directly from the customers

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71. Would a company that produces a complementary product to yours be considered a competitor (e.g. a tennis ball maker and a tennis racket maker)?

Yes, they will try to put you out of business for sure

Yes, they could expand into your market with their industry expertise

No, they are restricted by law against entering your market

No, they won't know how to enter your market

Answer

Correct Answer: Yes, they could expand into your market with their industry expertise

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72. What best describes a cost-leadership strategy?

Focus on product quality

Focus on marketing

Focus on pricing

None of the above

Answer

Correct Answer: Focus on pricing

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73. What are core competencies?

Things your company is not good at

What your competition is good at

The management team

Things that you and your company are the strongest at

Answer

Correct Answer: Things that you and your company are the strongest at

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74. What is a "Pay Per Click" marketing campaign?

Television advertising based on channel changing

Radio advertising

Online advertising where a company pays each time their advertisement is clicked on, typically on a website where the company's target market would often be found

Print ads distributed with newspapers

Answer

Correct Answer: Online advertising where a company pays each time their advertisement is clicked on, typically on a website where the company's target market would often be found

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75. What is meant by Target Marketing?

Placing a television ad during prime time spots

Directing your marketing efforts towards a specific demographic or customer type

Handing out flyers at a football game

Marketing outside of the Target retail store

Answer

Correct Answer: Directing your marketing efforts towards a specific demographic or customer type

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76. Which of the following would be a value proposition?

Wal-Mart offers the cheapest prices around on a wide range of merchandise.

Wal-Mart uses coupons to entice visitors to the store

Wal-Mart hires elderly people

Wal-Mart is always busy

Answer

Correct Answer: Wal-Mart offers the cheapest prices around on a wide range of merchandise.

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77. How detailed should a business plan be?

As detailed as possible, making each section very clear and specific

Very vague, leaving the reader having to ask several questions

Somewhat clear, answering general questions but including nothing specific

None of the above

Answer

Correct Answer: As detailed as possible, making each section very clear and specific

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78. Which of the following factors would be used in estimating revenue?

Current telephone rates

Number of employees

Market size

Interest rates

Answer

Correct Answer: Market size

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79. What section of the financial forecast would expenditure on telephones be forecasted under?

Revenue

Cost of goods sold

Short term liabilities

SG&A

Answer

Correct Answer: SG&A

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80. What market segment is an airline offering no frills targeting?

Price sensitive people

Time sensitive people

Anyone who will fly their airline

Answer

Correct Answer: Price sensitive people

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81. Would you ever consider talking to your competitors directly?

No, you do not want to give away any information about the company

Only if you can get them to talk without you having to talk

Yes, but only if they pay you for information

Yes, companies often discuss their business models with competitors as it is often not a secret, and both parties can benefit

Answer

Correct Answer: Yes, companies often discuss their business models with competitors as it is often not a secret, and both parties can benefit

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82. What is meant by Value Proposition?

The same as by marketing strategy

How a company plans to raise capital

How a company plans to price their product

A promise of value to be delivered and a belief from the customer that value will be experienced.

Answer

Correct Answer: A promise of value to be delivered and a belief from the customer that value will be experienced.

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83. For a typical executive summary, what is the maximum length?

Half a page

2 paragraphs

1 page

3 pages

Answer

Correct Answer: 3 pages

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84. The section of your business plan that is similar to an "elevator pitch" is the:

Market Analysis

Appendix

Company Description

Executive Summary

Answer

Correct Answer: Company Description

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85. The first thing to assess in your market analysis is the:

Competitive analysis

Industry outlook

Target market

Size of primary target market

Answer

Correct Answer: Industry outlook

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86. What will a VRIO framework help distinguish?

Organizational structure

Financial potential

Competitive potential

Size of the target market

Answer

Correct Answer: Competitive potential

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87. In a business plan the Funding Requests portion should include:

Expected Employee Retention

All of the above

Competitors Product Cycle

Strategic Financial Situations

Answer

Correct Answer: Strategic Financial Situations

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88. What is the post-money valuation for a $1.5 million round of investment when the equity stake offered is 25%?

$6 million

$375,000

$4.5 million

$1.5 million

Answer

Correct Answer: $6 million

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89. A good way to analyze the external environment is with a(n):

PEST Analysis

VRIO Framework

None of these

SWOT Analysis

Answer

Correct Answer: PEST Analysis

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90. A pricing strategy where you set your prices high for quick cash and little emphasis on market penetration is called:

Luxury illusion

Top shelf pricing

Market saturation

Price skimming

Answer

Correct Answer: Price skimming

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91. In the Competitive Analysis It's important to include:

Potential Barriers to the Market

SWOT Analysis

Financial Statements

Answer

Correct Answer: Potential Barriers to the Market

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92. What is not included in variable costs?

Technology

Supplies

Direct sales

Packaging

Answer

Correct Answer: Technology

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93. The use of exhibits are intended for:

Breaking up the writing

Showing your graphing skills

Visual information that is easier to interpret than words

All of these

Answer

Correct Answer: Visual information that is easier to interpret than words

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94. True or False? It is acceptable to use business jargon or pop culture references in a business plan.

True

False

Answer

Correct Answer: False

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95. Financial Projections are done before Market Analysis and objectives are set. True or False.

True

False

Answer

Correct Answer: False

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96. The Purpose of the Company Description in the Business Plan is:

Describe the nature of your business and list the marketplace needs that you are trying to satisfy.

List the specific consumers, organizations or businesses that your company serves or will serve.

(all of these)

Explain how your products and services meet these needs.

Answer

Correct Answer: (all of these)

Note: This Question is unanswered, help us to find answer for this one

97. The main reason that business fail is due to not having enough?

Employees

Sales Leads

Cash-flow

Inventory On Hand

Answer

Correct Answer: Cash-flow

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98. A Business Plan should not include a section about regulatory issues since this is out of the business owners hands. True or False

False

True

Answer

Correct Answer: False

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99. What should the prospective financial data include?

Cash flow statements

Income statements

Balance sheets

All of these

Answer

Correct Answer: All of these

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100. When requesting funding it's important to be clear on:

Time period funding is for

Timing of funds

Type of funding (Equity vs Debt)

All of these

Answer

Correct Answer: All of these

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101. SWOT Stands for

(none of these)

Strengths, Weakness, Origination, Targets

Strengths, Weaknesses, Opportunities, Threats

Simple While On Target

Answer

Correct Answer: Strengths, Weaknesses, Opportunities, Threats

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102. Sales targets should be:

Measurable

Specific

Lofty

Both specific and measurable

Answer

Correct Answer: Both specific and measurable

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103. What is the Executive Summary of a Business Plan?

Summary Provided To Bank Executives

A snapshot of your business plan as a whole and touches on your company profile and goals.

Plan of Executive Orders

Answer

Correct Answer: A snapshot of your business plan as a whole and touches on your company profile and goals.

Note: This Question is unanswered, help us to find answer for this one

104. Ratio and Trend Analysis can help to create a better picture of profitability and growth potential. True or False

True

False

Answer

Correct Answer: True

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105. True or Fales: An Organization Chart is a diagram that shows the structure of an organization and the relationships and relative ranks of its parts and positions/jobs.

True

False

Answer

Correct Answer: True

Note: This Question is unanswered, help us to find answer for this one

106. True or False: The Market Analysis of your business plan should illustrate your industry and market knowledge as well as any of your research findings and conclusions.

False

True

Answer

Correct Answer: True

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107. Which of these is an example of a competitive strategy?

All of these

Promotion

Pricing

Distribution

Answer

Correct Answer: All of these

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108. True or False? A business plan should state a value proposition.

True

False

Answer

Correct Answer: True

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109. It is common for creditors to want historial financial statements, True or False

False

True

Answer

Correct Answer: True

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110. Legal issues like non-disclosure agreements and patents are NOT important considerations for the business.

False

True

Answer

Correct Answer: False

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111. True or False: A partnership is normally run by one entreprenuer

True

False

Answer

Correct Answer: False

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112. An appendix may include:

All of these

Résumés

Letters of reference

Building permits

Answer

Correct Answer: All of these

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113. True or False? You should have concise bulleted lists in a business plan.

False

True

Answer

Correct Answer: True

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114. Potential creditors will often be interested in gaining collateral before lending. True or False

True

False

Answer

Correct Answer: True

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115. True or False? A business plan should only focus on short term objectives

True

False

Answer

Correct Answer: False

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116. True or False: Start-up companies are almost always succesful in the first few years.

True

False

Answer

Correct Answer: False

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117. Who are the most important readers of a business plan?

Employees

Customers

Competitors

Investors

Answer

Correct Answer: Investors

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118. In the financial forecasting, operating profit margin should be:

Negative

Positive

Unchanged

Answer

Correct Answer: Positive

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119. What should organizational structures include?

All of these

Management résumés

Forms of ownership

Percentage of ownership

Answer

Correct Answer: All of these

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120. New funds can be put toward which of the following?

All of the above

Debt retirement

Working capital

Acquisitions

Answer

Correct Answer: All of the above

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121. In a competitor analysis, what should you focus on?

Barriers to entry

All of these

Component costs

Prime customer motivators

Answer

Correct Answer: All of these

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122. True or False: Narrowing the target for potential clients helps because it concentrates sales efforts to a selective group that is most likely to be most profitable.

True

False

Answer

Correct Answer: True

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123. What is the first section in a traditional business plan?

Marketing plan

Financials

Management profile

Executive summary

Answer

Correct Answer: Executive summary

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124. How long should a typical business plan project for?

8-10 years

6 months

12 months

3-5 years

Answer

Correct Answer: 3-5 years

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125. The 4Ps are also known as:

Promotions

Marketing trends

Market demographics

Marketing mix

Answer

Correct Answer: Marketing mix

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126. Estimating capital requirements is important for the:

Break-even analysis

Product management

Product design

Marketing

Answer

Correct Answer: Break-even analysis

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127. Which should NOT be included in an executive summary?

Exhibits

Name of founders

Dates

Current investors

Answer

Correct Answer: Exhibits

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128. Financial Statements Include

Income Statement

Balance Sheet

All of the above

Cash Flow Statement

Answer

Correct Answer: All of the above

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