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1
As stated in "The Engine of Capitalist Process: Entrepreneurs in Economic Theory," nations should not forget entrepreneurs in their economic planning for all of the following reasons except that they:
A)help stabilize the rates of interest.
B)increase economic productivity.
C)contribute to technological change.
D)create resource efficiency.
2
According to "The Engine of Capitalist Process: Entrepreneurs in Economic Theory," the Old Economy definitions are changing because:
A)major international corporations are becoming ever more powerful.
B)the technological economic bubble has burst.
C)new technologies have transformed how things are produced.
D)the American government is fully supporting entrepreneurship and small companies.
3
As cited in "The Engine of Capitalist Process: Entrepreneurs in Economic Theory," it was major corporations, not the entrepreneurs, that created the New Economy.
A)True
B)False
4
As set forth in "Building Entrepreneurial Economies," the American entrepreneurial system is composed of:
A)high-impact entrepreneurs, the government, small mature firms, and private colleges.
B)universities, small businesses, the government, and large businesses.
C)high-impact entrepreneurs, large mature firms, the government, and universities.
D)start-up firms, large established firms, state universities, and state governments.
5
As stated in "Building Entrepreneurial Economies," research on entrepreneurship shows that:
A)in 2003, approximately 20 out of every 100 working adults in the United States was engaged in entrepreneurial activity.
B)most net new jobs are created either by start-up activity or by firms in a rapid-expansion phase.
C)during the early 2004, one fourth of the venture-capital dollars in the United States were invested in early-stage companies.
D)Japan has the second-highest per-capita rate of entrepreneurial activity of 37 countries studied.
6
According to "Building Entrepreneurial Economies," new firms should be regarded as adversaries of established businesses.
A)True
B)False
7
As reported in "Entrepreneurs in the U.S. Face Less Red Tape," research shows that:
A)50 percent of Europeans said that one should be willing to start a business even if there is high risk that it would fail.
B)only 25 percent of adults in Japan would want to be an entrepreneur.
C)more than 70 percent of adult Americans would prefer being an entrepreneur to working for someone else.
D)only 30 percent of adults in Canada would prefer entrepreneurship over working for someone else.
8
As stated in "Entrepreneurs in the U.S. Face Less Red Tape," entrepreneurship is more widespread in the United States than other countries for all of the following reasons except that:
A)the United States is a nation of immigrants, and its residents have inherited a sense of gumption from past generations.
B)there are many wealthy Americans who have the large amounts of capital required to start up new businesses.
C)the United States has created a policy environment that is friendly toward entrepreneurs.
D)Americans have a greater tolerance for risk.
9
As set forth in "Entrepreneurs in the U.S. Face Less Red Tape," new firms have raised substantial amounts of capital by issuing junk bonds.
A)True
B)False
10
As described in "Who Are the Self-Employed?" a woman's decision to enter self-employment differs from a man's because of all the following except:
A)differences in labor-market opportunities.
B)more male-oriented occupations lend themselves to self-employment.
C)differences in lifetime occupational strategy.
D)vastly different costs and benefits to self-employment.
11
In the United States, the prototypical self-employed person, according to "Who Are the Self-Employed?" is:
A)an Asian male, 35-44 years old, who lives in the West and works in an executive, administrative, or managerial occupation.
B)a black female, 45-54 years old, who operates a child-care facility in her New England home.
C)a white male, over 65 years of age, who works in precision production in the South.
D)a white male or female, 25-34 years of age, who works in the Midwest construction industry.
12
When using CPS data, it is important to note that those who have incorporated their businesses are not considered to be self-employed, as cited in "Who Are the Self-Employed?"
A)True
B)False
13
As presented in "The Making of an Entrepreneur," the difference between an employee and an entrepreneur is that an entrepreneur:
A)runs a company, while an employee merely works for a company.
B)has innovative ideas, while an employee does not think outside the box.
C)founds a company, while an employee works for someone else.
D)is an overachiever, while an employee is content with the status quo.
14
According to "The Making of an Entrepreneur," the most important investment an entrepreneur can make in his or her business is:
A)money.
B)time.
C)energy.
D)faith.
15
As claimed in "The Making of an Entrepreneur," all supervisory work experience can "count" as entrepreneurial experience.
A)True
B)False
16
As pointed out in "Leader of the Pack," judges were most impressed by the fact that Smith:
A)has worked 70-hour weeks for years.
B)created something from scratch.
C)has made a fortune.
D)is a strong disciplinarian.
17
As suggested in "Leader of the Pack," the greatest influence on Smith's management style comes from:
A)historical figures.
B)characters in classic novels.
C)biblical heroes.
D)successful CEOs and entrepreneurs in the business world.
18
As stated in "Leader of the Pack," the location of production is unimportant in the high-tech and high-value-added sectors.
A)True
B)False
19
As mentioned by two of the entrepreneurs in "Success Rules!" financial success is not everything. They make suggestions for attaining lifestyle success also, including all of the following except:
A)do what you want to do.
B)seek out quality, supportive relationships.
C)maintain a vision for all areas of your life.
D)invest time and energy in your business and enjoy health and wealth later in life.
20
As recounted in "Success Rules!" Cash Nickerson's advice does not include:
A)continue collecting your corporate paycheck while launching your start-up.
B)start with the exit in mind.
C)share equity with your employees.
D)do not lie to yourself when things are not going well.
21
As discussed in "Success Rules!" many successful entrepreneurs leave corporate jobs to launch their own businesses.
A)True
B)False
22
As noted in "To Get Ahead, Own the Store," many minority women start their own businesses because:
A)they want to employ relatives.
B)doing so brings them community prestige.
C)the alternatives do not look attractive.
D)their limited English-language skills rule out most other types of employment.
23
As detailed in "To Get Ahead, Own the Store," of the following groups, each accounted for more than 25 percent of those owned by minority women except:
A)Asian Americans and Pacific Islanders.
B)Native Americans and Native Alaskans.
C)African Americans.
D)Hispanics.
24
As noted in "To Get Ahead, Own the Store," although Hispanic women earn less than white men, they make as much as white women.
A)True
B)False
25
As discussed in "The New Road to Riches," build-to-flip entrepreneurs often set up shop with the purpose of:
A)developing a revolutionary new technology.
B)developing narrow technologies to add features to existing products.
C)putting an existing company out of business.
D)becoming the next Bill Gates.
26
As outlined in "The New Road to Riches," entrepreneurs who start up new tech companies should:
A)give themselves a limit of 12 months to develop their technology, build sales, and find a buyer.
B)go door-to-door to tell big companies about their offerings.
C)keep operations such as payroll in-house to save money.
D)use the best available chips and other key components to produce a superior-quality product.
27
As stated in "The New Road to Riches," the IPO market is one of the most likely avenues for entrepreneurs to attain their fortunes.
A)True
B)False
28
As advised in "One More Time ... Should Small Companies Attempt Strategic Planning?" and attributed to General Eisenhower, business success is not based on the plan, it is based on the:
A)strategy.
B)planning.
C)competing.
D)organizing.
29
As noted in "How Entrepreneurs Craft Strategies That Work":
A)too much business analysis can be harmful.
B)entrepreneurs can never do too much analysis.
C)slow entry into a new market is less risky than fast entry.
D)there is no benefit in analyzing a new market.
30
As reported in "How Entrepreneurs Craft Strategies That Work," most entrepreneurs get their ideas from:
A)researching opportunities.
B)their previous employment.
C)magazine articles.
D)family members.
31
As discussed in "How Entrepreneurs Craft Strategies That Work," entrepreneurs often have to scrap their initial business strategies and start over.
A)True
B)False
32
As noted in "Seven Keys to Shaping the Entrepreneurial Organization," entrepreneurs should hire people who:
A)are affordable--start-up operations cannot afford to break the bank when hiring.
B)can guide themselves.
C)look for their motivation from without--these people will respond best to direction.
D)are mavericks who prefer to work alone rather than in teams.
33
As pointed out in "Seven Keys to Shaping the Entrepreneurial Organization," creating a "we are all in this together" mentality involves:
A)having managers wear matching T-shirts with the company logo.
B)finding out about associates' dreams.
C)getting the entire staff to play team sports after hours.
D)treating everyone within the organization the same.
34
As stated in "Seven Keys to Shaping the Entrepreneurial Organization," the most successful entrepreneurs are "Lone Rangers" who have accomplished their greatness through individual achievement.
A)True
B)False
35
As described in "Characteristics of a Successful Entrepreneurial Management Team," all of the following are early errors committed by entrepreneurs except:
A)underpricing.
B)weak cash management.
C)team inadequacies.
D)an unwillingness to work to succeed.
36
As stated in "Characteristics of a Successful Entrepreneurial Management Team," all of the following are true about successful entrepreneurs except that they:
A)are willing to take high risks.
B)do not learn from failure.
C)use criticism to their benefit.
D)seek personal responsibility.
37
As expressed in "Characteristics of a Successful Entrepreneurial Management Team," most entrepreneurs seeking money from venture-capital firms are not successful.
A)True
B)False
38
As suggested in "Listening to Your Inner Entrepreneur," an entrepreneur's job is all about feeling:
A)lost and finding a way back.
B)confused.
C)defiant.
D)courageous.
39
As concluded in "Listening to Your Inner Entrepreneur," creativity is all about:
A)admiration.
B)untiring whimsy.
C)attitude.
D)having money to pursue a special course of action.
40
As stated in "Listening to Your Inner Entrepreneur," when ideas are initially thrown out on the table, they are always hailed as brilliant notions.
A)True
B)False
41
As maintained in "How to Write a Great Business Plan," the context section of a business plan refers to:
A)how the product or service will be received by the consumer.
B)how the product or service meets new consumer needs.
C)the macroeconomic and regulatory environment.
D)the venture's market-competitiveness.
42
According to "How to Write a Great Business Plan," the major problem with most business plans is that they:
A)are too long.
B)focus too much on numbers.
C)do not talk about the central product or service idea.
D)are focused on finding investors.
43
As expressed in "How to Write a Great Business Plan," a great business plan is one of the best predictors of a venture's success.
A)True
B)False
44
Written business plans, as noted in "Outline for a Business Plan: A Proven Approach for Entrepreneurs Only," generally serve as the most effective means of communication between entrepreneurs and:
A)job candidates.
B)suppliers.
C)the management team.
D)potential investors.
45
According to "Outline for a Business Plan: A Proven Approach for Entrepreneurs Only," many entrepreneurs claim that they have not been able to establish a detailed business plan because they:
A)lack the financial skills necessary to create one.
B)do not have time for planning because of all the daily management pressures of a new business.
C)have already found all the investor capital they need for the first year of operation.
D)do not believe potential investors will take the time to examine one carefully.
46
A business plan, as maintained in "Outline for a Business Plan: A Proven Approach for Entrepreneurs Only," should only contain short-term growth estimates, projecting no more than one year into the future.
A)True
B)False
47
As highlighted in "Pursuing Venture Capital," the most knowledgeable entrepreneurs with the best deals still:
A)get better tax breaks from the government.
B)keep their eye on the bottom line.
C)consistently refuse buyout offers.
D)receive multiple competitive offers from financiers vying for the best chance to invest in their companies.
48
As noted in "Pursuing Venture Capital," as an entrepreneur seeking venture capital, you are:
A)too much in the public arena.
B)risking all and gaining nothing.
C)at the most fundamental level, a seller.
D)always competitive.
49
One of the biggest challenges entrepreneurs face when pursuing funding is gaining access to venture capitalists, as pointed out in "Pursuing Venture Capital."
A)True
B)False
50
As outlined in "Venture Impact 2004: Venture Capital Benefits to the U.S. Economy," the stages in the investment financing of a firm include:
A)seed, start-up, and transition.
B)seed, start-up, and early.
C)early, expansion, and transition.
D)start-up, transition, and later.
51
As noted in "Venture Impact 2004: Venture Capital Benefits to the U.S. Economy," the United States has the following share of the total worldwide venture capital:
A)34 percent.
B)50 percent.
C)72 percent.
D)95 percent.
52
As stated in "Venture Impact 2004: Venture Capital Benefits to the U.S. Economy," ventured firms increased their size and share in the economy over the last three years, despite the dot-com bust and high-tech-equipment sales downturn.
A)True
B)False
53
The chances of success of new firms, as described in "Venture Capitalists' Assessment of New Venture Survival," is generally related to:
A)the enthusiasm of the founders.
B)interest and optimism on the part of venture capitalists.
C)the whim of the market.
D)strategic decisions made by the firm.
54
A population ecology perspective in examining a new company's chances of success, as explained in "Venture Capitalists' Assessment of New Venture Survival," is concerned with the:
A)number of customers a firm has.
B)limitations imposed on a business by its newness.
C)competitive environment a new firm enters.
D)people involved in the company.
55
As suggested in "Venture Capitalists' Assessment of New Venture Survival," most of the literature about venture capitalists has ignored the fact that investors may have different criteria for judging companies in different stages of development.
A)True
B)False
56
Many entrepreneurs, as described in "Ready or Not?" fail to win the support of needed investors because they:
A)do not offer a high enough return on investment.
B)ask for far too much money up front.
C)are unwilling to part with equity in the company.
D)have not adequately prepared themselves prior to asking for capital funding.
57
Attracting numerous small investors for a new venture, as explained in "Ready or Not?" can be risky because:
A)each investor will demand different terms and because the process can be time-wasting and complicated.
B)internal problems could develop between the various investors, which could lead to the withdrawal of some funds.
C)having more investors increases the chance that one or more of them will at some point try to take control of the company.
D)larger investors will be reluctant to join the group, thinking the deal might be too risky if the others are only willing to invest small sums.
58
Many entrepreneurs, like George Searle, as profiled in "Ready or Not?" find that raising capital is an ongoing process.
A)True
B)False
59
As claimed in "The Entrepreneur's Financial-Fitness Checklist," when beginning a business, it is most important to know:
A)how to find reliable accountants and auditors.
B)the basics of finance.
C)more about finance than your accountant does.
D)the ins and outs of the latest technology.
60
As asserted in "The Entrepreneur's Financial-Fitness Checklist," your benchmark for measuring how your company is doing financially should be:
A)your own expectations.
B)the success of similar companies.
C)your company's tax returns.
D)how much money your company nets in the first year.
61
As set forth in "The Entrepreneur's Financial-Fitness Checklist," when paying vendors, consistency is more important than timeliness.
A)True
B)False
62
As reported in "Solving the Puzzle of the Cash Flow Statement," the essential figure that summarizes financial health is:
A)net income.
B)net cash provided by operations.
C)net cash used for investing.
D)net increase or decrease in cash.
63
According to "Solving the Puzzle of the Cash Flow Statement," cash flow statements include all of the following sections except cash flow from:
A)operating activities.
B)investing activities.
C)working capital activities.
D)financing activities.
64
As explained in "Solving the Puzzle of the Cash Flow Statement," the direct and indirect formats showing cash flow from operating activities show two different bottom lines.
A)True
B)False
65
As noted in "The ABCs of Borrowing for Growth," convertible-debt instruments are desirable to investors for all of the following reasons except that:
A)they are convenient because they generally remove the risk of equity investments at valuations that prove too high.
B)upside potential is high for the investors because there is no discount on conversion at the next round of investment.
C)they allow lender/investors to enjoy a modest return on investment as interest with all the upside opportunity of shareholder after conversion.
D)legal fees for completing this form of investment are substantially lower than for conventional equity investments.
66
As pointed out in "The ABCs of Borrowing for Growth," bank debt is usually used by:
A)slow-growth, early-stage companies to supplement venture capital in rapidly ramping up growth.
B)entrepreneurs with start-up companies who want to get up and running quickly.
C)entrepreneurs looking for seed money.
D)high-growth, later-stage companies to supplement venture capital in rapidly ramping up growth.
67
As stated in "The ABCs of Borrowing for Growth," new investors funding bridge loans prefer that all new funds be used to grow the company and not to repay debt.
A)True
B)False
68
As pointed out in "Harnessing Innovation," National Venture Capital Association statistics indicate that corporate venture capital still accounts for:
A)half of the venture deals and one third of the venture spending.
B)one fourth of the venture deals and one sixth of the venture spending.
C)three fourths of the venture deals and half of the venture spending.
D)one fifth of the venture deals and one tenth of the venture spending.
69
As stated in "Harnessing Innovation," the major worldwide players in corporate VC include:
A)Nokia, Kodak, and Softbank.
B)IBM, Nokia, and Intel.
C)Intel, Softbank, and Verizon.
D)Compaq, Kodak, and SmithKline.
70
As noted in "Harnessing Innovation," CEOs who are "in the know" are maintaining or even increasing support for their venture units despite an economic downturn.
A)True
B)False
71
As noted in "A Kick-Start for Entrepreneurs," the largest of the federal government's Small Business Innovative Research Program funds is run by the:
A)National Institutes of Health.
B)Defense Department.
C)National Science Foundation.
D)Department of Energy.
72
As pointed out in "A Kick-Start for Entrepreneurs," the main criterion for choosing grant recipients is:
A)the originality of their inventions.
B)their commercial market potential.
C)their commitment to global competitiveness.
D)their commitment to becoming a research facility.
73
As stated in "A Kick-Start for Entrepreneurs," the federal government's small-business innovation funds are based on a fixed percentage of annual outside-research budgets, and thus the amounts vary from year to year.
A)True
B)False
74
As noted in "Field of Dreams," indicators that venture capitalists are "getting their appetites back" include all of the following except:
A)billboards along Highway 101 are filling up.
B)traffic jams are worsening in Silicon Valley.
C)there was an up-tick in venture deals funded during the last quarter of 2003.
D)there are lines out the door at Buck's diner.
75
As stated in "Field of Dreams," entrepreneurs can court the people to fund their dreams by:
A)telling them how much more wealth they will accumulate.
B)appealing to their sense of hope.
C)throwing themselves on their mercy.
D)stimulating their competitiveness by hinting about the other investors interested in the project.
76
As pointed out in "Field of Dreams," a wide gap between corporate profits and capital spending is a strong sign that business investment is about to take off again.
A)True
B)False
77
As concluded in "Negotiating Venture-Capital Transactions," a company's ability to secure venture-capital financing will be improved by all of the following except:
A)a well-prepared business plan.
B)evidence of lessons learned from past failures.
C)an understanding of the analysis conducted by venture capitalists.
D)awareness regarding the legal documents prepared for a venture-capital transaction.
78
As stated in "Negotiating Venture-Capital Transactions," the most typical form of security issued in connection with venture-capital financing is:
A)preferred stock.
B)common stock.
C)convertible debentures.
D)debt securities with warrants.
79
As described in "Negotiating Venture-Capital Transactions," within a venture-capital agreement, the Investment Agreement covers only non-financial matters.
A)True
B)False
80
As set forth in "The Do's and Don'ts of Fund Raising," entrepreneurs must work harder to secure venture capital because of all the following reasons except that:
A)record-breaking numbers of companies are seeking venture capital.
B)fewer start-ups are considered worthy of venture capital.
C)less venture capital is available.
D)venture capitalists are more cautious with their money.
81
One of the biggest mistakes a growing company can make, as counseled in "The Do's and Don'ts of Fund Raising," is to:
A)survey customers and stake out a niche for itself.
B)go for second-round financing.
C)skimp on preparation for a presentation to a venture capitalist.
D)demonstrate its past track record.
82
Because different skill sets are needed to launch, grow, and maintain a venture, entrepreneurs must tailor management biographies to their company's development phase for a better chance at venture capital, as suggested in "The Do's and Don'ts of Fund Raising."
A)True
B)False
83
As emphasized in "All in the Delivery," when courting investors, an entrepreneur should have a plan that:
A)is offbeat and funny.
B)promises almost-immediate returns on investment.
C)appeals primarily to banks.
D)is marketed in a powerful, professional way.
84
As quoted in "All in the Delivery," investment advisor Mark Makropoulos suggests that potential investors be attracted by:
A)proposals with a video component.
B)getting them emotionally invested.
C)a business plan that promises profits within one year.
D)a business plan with many funding variables.
85
As presented in "All in the Delivery," an entrepreneur needs to market an investment opportunity so investors will believe that the product can be marketed.
A)True
B)False
86
As addressed in ""Are You Built to Grow?"," the first decision regarding growth is:
A)should the company grow?
B)how big should the company grow?
C)how should the company grow?
D)how fast should the company grow?
87
According to ""Are You Built to Grow?"," having employees bring in qualified job applicants will succeed if all of the following occur except:
A)employees are paid a bonus equal to what a headhunter would earn.
B)the CEO promotes this program.
C)the program is run by the human-resources department.
D)this program is a critical part of job performance for current employees.
88
As reported in ""Are You Built to Grow?"," in the midst of rapid growth, employees and new hires get to know each other more quickly if the physical setting is static until the growth slows down.
A)True
B)False
89
According to "Managing Growth," one of the most difficult aspects of the transition period between entrepreneurial and professional management is the:
A)finding of top management talent.
B)necessary changes in entrepreneur behavior and attitude.
C)effort required to plan the formal changeover.
D)act of convincing the board of directors that such changes, and their accompanying expenses, are necessary.
90
As presented in "The Big Question: To Grow or Not to Grow?" one of the trickiest things for many small businesses is deciding:
A)how many people to lay off during a slump.
B)whether or not to expand during a time of strong economic growth.
C)what size the business should be.
D)how many investors the company needs.
91
As noted in "The Big Question: To Grow or Not to Grow?" the Small Business Administration classifies as small any company that:
A)is started by an entrepreneur.
B)has fewer than 500 workers.
C)does not provide benefits to its employees.
D)does not have an expansion plan in place.
92
As suggested in "The Big Question: To Grow or Not to Grow?" high-quality staff are usually not interested in short-term positions.
A)True
B)False
93
A critical component of corporate growth, as related in "Three Strategies for Managing Fast Growth," is:
A)duplication.
B)granulation.
C)knowledge.
D)scaling.
94
According to "Managing Global Expansion: A Conceptual Framework," a company interested in becoming global should:
A)follow a particular, well-established plan.
B)avoid local competition.
C)enter all markets at once.
D)use an approach of directed opportunism.
95
As discussed in "Managing Global Expansion: A Conceptual Framework," the Ritz-Carlton's approach to embed its corporate DNA in Shanghai, China, began with:
A)replacing employees with imported workers.
B)using local management personnel to make decisions.
C)renovation of the employee entrance and washrooms.
D)upgrading customer facilities.
96
As explained in "Managing Global Expansion: A Conceptual Framework," the greater the degree of adaptation a product requires, the greater the risk of failure.
A)True
B)False
97
As noted in "Innovation Special: Entrepreneurs," being exceptional at the early phase of building a business:
A)indicates that the entrepreneur will be exceptional throughout every stage of the company's development.
B)is no guarantee that an entrepreneur will be able to keep venture capitalists happy.
C)often means that an entrepreneur will burn out once the company is up and running.
D)ensures that the entrepreneur will be able to run a highly profitable business.
98
As pointed out in "Innovation Special: Entrepreneurs," both founders and their companies are better off if the entrepreneurs:
A)spend most of their time networking and trying to drum up business.
B)turn their attention from innovating to managing.
C)step aside and transfer responsibility for innovation to a creative management team.
D)listen to their own passions and set themselves up as an "entrepreneurial engine."
99
According to "Innovation Special: Entrepreneurs," companies stop needing their founders once the companies get off the ground.
A)True
B)False
100
Harvesting, as described in "Harvesting Firm Value: Process and Results," is the practice of:
A)gaining the cash return on the original investment in the company.
B)diversifying a large company into several smaller, independent units.
C)ensuring that retirement benefits will be in place for as long as the company is in business.
D)gradually buying out investors so that a company remains the sole property of the founder.
101
The creation of a harvest strategy, as explained in "Harvesting Firm Value: Process and Results," is best done:
A)prior to creating the first business plan for a new company.
B)when a company has reached its maximum growth potential.
C)as soon as the founders of a company have paid off outstanding debts.
D)early in the company's growth phase, as an ongoing project.
102
In the United States, as noted in "Harvesting Firm Value: Process and Results," households have invested far more of their assets in privately held firms than in the public stock market.
A)True
B)False
103
As stated in "Choosing Your Exit Strategy," U.S. tax laws are a huge factor in an entrepreneur's decision to exit a business by:
A)selling to employees.
B)selling to an individual or other independent business.
C)passing control to heirs.
D)deciding to go public.
104
The disadvantages to an entrepreneur who sells a business to another individual or business include, according to "Choosing Your Exit Strategy," all of the following except:
A)losing liquidity in one's personal estate.
B)giving up one's "life work."
C)giving up control of one's business.
D)passing up the opportunity to further grow the business and its value.
105
As advised in "Choosing Your Exit Strategy," entrepreneurs should wait several years to choose an exit strategy to see how their business develops.
A)True
B)False
106
Commencing the audit process several years in advance of the IPO, as proposed in "The Initial Public Offering: Early Planning Considerations," is important for all of the following reasons except to:
A)obtain the required audited financial statements.
B)contract for the services of a Big Six accounting firm as required by law for an IPO.
C)develop and maintain the accounting and control system necessary for reliable financial information.
D)comply with the reporting requirements of a public company.
107
As cautioned in "The Initial Public Offering: Early Planning Considerations," certain management decisions and corporate transactions that can create or avoid significant problems with an IPO can occur as much as:
A)several months in advance.
B)one year in advance.
C)18 months in advance.
D)three years in advance.
108
Changing a company to an employee-owned status through an ESOP:
A)makes management rich.
B)creates community goodwill.
C)has tax advantages for the company.
D)makes customers nervous about the company's future.
109
According to "The Joys of An ESOP," ESOPs are set up:
A)as mutual funds in which employees can buy and sell their shares.
B)as trusts.
C)like an insurance company.
D)primarily to benefit hourly wage workers.
110
As given in "The Joys of An ESOP," the trustee of an ESOP cannot be current management.
A)True
B)False
111
As suggested in "Selling a Family Enterprise: Tough to Decide and to Do," once family business owners have decided to sell their companies they should do all of the following except:
A)get an independent appraisal of the business.
B)decide if an offer is just a fishing expedition.
C)remove from their facility such non-business-related items as wall hangings, plants, and appliances.
D)be wary of accepting stock instead of cash in payment.
112
As pointed out in "Selling a Family Enterprise: Tough to Decide and to Do," the percentage of family businesses surveyed that say they plan to change leadership within the next five years is:
A)50.
B)39.
C)17.
D)64.
113
As reported in "Selling a Family Enterprise: Tough to Decide and to Do," most family business owners who plan to retire within five years have not laid out what will happen to the company after they leave.
A)True
B)False
114
As noted in "Oiling the Hinges on Your Exit Strategy," the hardest part about selling a business is:
A)finding an appropriate buyer.
B)making the decision to do it.
C)having to prepare employees and family members for possible job loss.
D)trying to decide what to do after the sale.
115
As pointed out in "Oiling the Hinges on Your Exit Strategy," the percentage of time business owners transfer their businesses to key employees or family members is:
A)35.
B)20.
C)75.
D)50.
116
As stated in "Oiling the Hinges on Your Exit Strategy," most business owners expect that what they get for their company is going to finance the lifestyle they want for the rest of their lives.
A)True
B)False
117
According to "Company for Sale by Owner--Or Maybe Not," all of the following are the assets a good business broker provides its client, except:
A)capability to run the company.
B)expertise at finding potential buyers.
C)contacts with sources of financing.
D)current knowledge of the marketplace.
118
As noted in "Company for Sale by Owner--Or Maybe Not," selling a company is now more painful than ever because of:
A)a cooling stock market.
B)decreasing interest rates.
C)global competitors.
D)a recent change in the tax law.
119
As claimed in "Company for Sale by Owner--Or Maybe Not," the most successful investment bankers specialize in a short list of industries.
A)True
B)False





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