Canadian Entrepreneurship and Small Business 9th Edition - Test Bank

Canadian Entrepreneurship and Small Business 9th Edition – Test Bank

 

Instant Download – Complete Test Bank With Answers

 

 

Sample Questions Are Posted Below

 

c5

Student: ___________________________________________________________________________

1. It is argued in the text that the most significant advantage of buying a business is
   A. it has already been registered with the authorities
   B. it has inventory
   C. it has an established image and track record
   D. to avoid being sued

 

2. According to the text, most businesses that are for sale
   A. are only marginally successful
   B. have valuable locations to transfer to a new owner
   C. provide a steady base on which to expand
   D. have a solid banking arrangements in place

 

3. Goodwill
   A. is the process of extending credit to needy customers
   B. measures the added value in a product
   C. always exist so long as a business operates
   D. is essentially a business’s favourable reputation

 

4. Common sources of businesses for sale include
   A. supermarket ad boards
   B. trade journals
   C. yellow pages (hard copy or web based)
   D. FAQ pages

 

5. If a business is not listed as being for sale
   A. its privacy should be respected
   B. then it won’t be for sale
   C. it’s not worth investigating it
   D. a prospective purchaser can ask the owner if they would be interested in selling

 

6. Government Departments
   A. are not likely to be aware of business for sale
   B. are never connected with individual businesses
   C. may be aware of businesses for sale
   D. often act as brokers in connecting purchasers and sellers of businesses

 

7. Industry analysis may not be required if
   A. a buyer has considerable experience in the industry
   B. the cost to do so would be prohibitive
   C. there is no information readily available
   D. the industry is not dominated by one large business

 

8. When purchasing a business, non-liquid assets
   A. should be considered not to have any value
   B. should be subjected to an independent appraisal
   C. should by ignored for business planning purposes
   D. should be valued at 20% of total fixed assets

 

9. Strong customer relations is usually an indictor
   A. of a market with few competitors
   B. of a high demand product or service
   C. of good management and employees
   D. of low pricing

 

10. Market value is
    A. the price where demand and supply meet
    B. the lowest amount that a seller will accept in the market
    C. the average of the three most recent sales transactions in an industry
    D. the net realizable value of a business’s fixed assets

 

11. The times earnings method is also called
    A. productivity velocity method
    B. return on investment accelerator
    C. efficiency measure
    D. the price-earnings ratio

 

12. An offer to purchase will most likely be made
    A. to the seller’s CEO
    B. by the buyer or through a realtor or lawyer
    C. by the buyer’s banker on behalf of the buyer
    D. anonymously (until accepted)

 

13. One of the attractive benefits of being a franchisee is
    A. future income is a high certainty
    B. it can replace a lost job
    C. there is no need to learn about an industry in depth
    D. the total freedom of owning your own business

 

14. According to research traditional franchise businesses include
    A. hotels
    B. construction
    C. retailing
    D. soft drink companies

 

15. The fastest growing sector in the Canadian economy is
    A. the service sector
    B. the professional sector
    C. the manufacturing sector
    D. the import/export sector

 

16. Under a franchising arrangement
    A. a franchisor owns an outlet
    B. both the franchisor and the franchisee operate an outlet
    C. a franchisee owns an outlet
    D. a franchisee develops the best system for their outlet

 

17. ________ is a type of franchise
    A. Manufacturer-retailer
    B. Wholesaler-retailer
    C. Retailer-service depot
    D. Franchise developer

 

18. A franchise system can best be characterized as
    A. a voluntary chain
    B. a money making machine
    C. a business excellence strategy
    D. an approach to market dominance

 

19. Established franchises can provide
    A. guaranteed cash flow
    B. franchisee success
    C. instant brand recognition
    D. healthy opportunities for franchisee creativity

 

20. Franchisee training is most likely to involve
    A. internet research
    B. personal industry reading
    C. competitor research
    D. site visits

 

21. Potential franchisees will usually have to provide
    A. the names of relatives who have succeeded in business
    B. collateral
    C. a current health certificate
    D. their work history

 

22. A proven franchise offers
    A. greater opportunity and more freedom
    B. small market share and weaker competition
    C. lower risk and higher financial investment
    D. higher returns and reduced employee turnover

 

23. Of the following elements, a potential franchisor should be concerned most about
    A. supply chains
    B. renewal and termination terms
    C. hours of (business operation
    D. future Canadian/US dollar exchange rates

 

24. Franchises with territorial protection
    A. are the most desirable
    B. are increasing in frequency
    C. are generally not possible
    D. are illegal due to non-competition laws

 

25. Becoming a franchisor
    A. is a retirement strategy
    B. is a way of reducing one’s management pressures
    C. is inevitable in a successful business
    D. is a form of entrepreneurship

 

26. Secret shoppers
    A. refers to customers who pretend not to be interested in making a purchase
    B. means asking someone else to make your purchase in their name
    C. is a strategy used by some franchisors
    D. are used in by government agencies to detect tax fraud

 

27. Future growth of franchising will
    A. reduce employment numbers
    B. make competition more difficult for small businesses in certain industries
    C. result in less competition
    D. lead to more monopolies

 

 

 

c5 Key

1. It is argued in the text that the most significant advantage of buying a business is
   A.it has already been registered with the authorities
   B. it has inventory
   C. it has an established image and track record
   D. to avoid being sued

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #1
Difficulty: Easy
Learning Objective: 05-01 Describe the advantages and disadvantages of purchasing an ongoing business compared with the other methods of small business ownership.
 

2. According to the text, most businesses that are for sale
   A.are only marginally successful
   B. have valuable locations to transfer to a new owner
   C. provide a steady base on which to expand
   D. have a solid banking arrangements in place

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #2
Difficulty: Easy
Learning Objective: 05-01 Describe the advantages and disadvantages of purchasing an ongoing business compared with the other methods of small business ownership.
 

3. Goodwill
   A.is the process of extending credit to needy customers
   B. measures the added value in a product
   C. always exist so long as a business operates
   D. is essentially a business’s favourable reputation

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #3
Difficulty: Medium
Learning Objective: 05-01 Describe the advantages and disadvantages of purchasing an ongoing business compared with the other methods of small business ownership.
 

4. Common sources of businesses for sale include
   A.supermarket ad boards
   B. trade journals
   C. yellow pages (hard copy or web based)
   D. FAQ pages

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #4
Difficulty: Easy
Learning Objective: 05-02 Identify the sources of businesses that are for sale.
 

5. If a business is not listed as being for sale
   A.its privacy should be respected
   B. then it won’t be for sale
   C. it’s not worth investigating it
   D. a prospective purchaser can ask the owner if they would be interested in selling

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #5
Difficulty: Medium
Learning Objective: 05-02 Identify the sources of businesses that are for sale.
 

6. Government Departments
   A.are not likely to be aware of business for sale
   B. are never connected with individual businesses
   C. may be aware of businesses for sale
   D. often act as brokers in connecting purchasers and sellers of businesses

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #6
Difficulty: Medium
Learning Objective: 05-02 Identify the sources of businesses that are for sale.
 

7. Industry analysis may not be required if
   A.a buyer has considerable experience in the industry
   B. the cost to do so would be prohibitive
   C. there is no information readily available
   D. the industry is not dominated by one large business

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #7
Difficulty: Medium
Learning Objective: 05-03 Explain how to evaluate a business that is for sale.
 

8. When purchasing a business, non-liquid assets
   A.should be considered not to have any value
   B. should be subjected to an independent appraisal
   C. should by ignored for business planning purposes
   D. should be valued at 20% of total fixed assets

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #8
Difficulty: Difficult
Learning Objective: 05-03 Explain how to evaluate a business that is for sale.
 

9. Strong customer relations is usually an indictor
   A.of a market with few competitors
   B. of a high demand product or service
   C. of good management and employees
   D. of low pricing

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #9
Difficulty: Difficult
Learning Objective: 05-03 Explain how to evaluate a business that is for sale.
 

10. Market value is
    A.the price where demand and supply meet
    B. the lowest amount that a seller will accept in the market
    C. the average of the three most recent sales transactions in an industry
    D. the net realizable value of a business’s fixed assets

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #10
Difficulty: Difficult
Learning Objective: 05-04 Describe the methods used in determining the price to pay for a business.
 

11. The times earnings method is also called
    A.productivity velocity method
    B. return on investment accelerator
    C. efficiency measure
    D. the price-earnings ratio

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #11
Difficulty: Easy
Learning Objective: 05-04 Describe the methods used in determining the price to pay for a business.
 

12. An offer to purchase will most likely be made
    A.to the seller’s CEO
    B. by the buyer or through a realtor or lawyer
    C. by the buyer’s banker on behalf of the buyer
    D. anonymously (until accepted)

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #12
Difficulty: Difficult
Learning Objective: 05-04 Describe the methods used in determining the price to pay for a business.
 

13. One of the attractive benefits of being a franchisee is
    A.future income is a high certainty
    B. it can replace a lost job
    C. there is no need to learn about an industry in depth
    D. the total freedom of owning your own business

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #13
Difficulty: Medium
Learning Objective: 05-05 Discuss the significance of franchising in the Canadian economy.
 

14. According to research traditional franchise businesses include
    A.hotels
    B. construction
    C. retailing
    D. soft drink companies

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #14
Difficulty: Easy
Learning Objective: 05-05 Discuss the significance of franchising in the Canadian economy.
 

15. The fastest growing sector in the Canadian economy is
    A.the service sector
    B. the professional sector
    C. the manufacturing sector
    D. the import/export sector

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #15
Difficulty: Easy
Learning Objective: 05-05 Discuss the significance of franchising in the Canadian economy.
 

16. Under a franchising arrangement
    A.a franchisor owns an outlet
    B. both the franchisor and the franchisee operate an outlet
    C. a franchisee owns an outlet
    D. a franchisee develops the best system for their outlet

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #16
Difficulty: Easy
Learning Objective: 05-06 Explain the various types of franchises available for small business.
 

17. ________ is a type of franchise
    A.Manufacturer-retailer
    B. Wholesaler-retailer
    C. Retailer-service depot
    D. Franchise developer

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #17
Difficulty: Medium
Learning Objective: 05-06 Explain the various types of franchises available for small business.
 

18. A franchise system can best be characterized as
    A.a voluntary chain
    B. a money making machine
    C. a business excellence strategy
    D. an approach to market dominance

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #18
Difficulty: Difficult
Learning Objective: 05-06 Explain the various types of franchises available for small business.
 

19. Established franchises can provide
    A.guaranteed cash flow
    B. franchisee success
    C. instant brand recognition
    D. healthy opportunities for franchisee creativity

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #19
Difficulty: Difficult
Learning Objective: 05-07 List the relative strengths and weaknesses of franchising as a method of starting a small business.
 

20. Franchisee training is most likely to involve
    A.internet research
    B. personal industry reading
    C. competitor research
    D. site visits

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #20
Difficulty: Medium
Learning Objective: 05-07 List the relative strengths and weaknesses of franchising as a method of starting a small business.
 

21. Potential franchisees will usually have to provide
    A.the names of relatives who have succeeded in business
    B. collateral
    C. a current health certificate
    D. their work history

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #21
Difficulty: Easy
Learning Objective: 05-07 List the relative strengths and weaknesses of franchising as a method of starting a small business.
 

22. A proven franchise offers
    A.greater opportunity and more freedom
    B. small market share and weaker competition
    C. lower risk and higher financial investment
    D. higher returns and reduced employee turnover

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #22
Difficulty: Medium
Learning Objective: 05-08 Explain how to evaluate a franchise opportunity.
 

23. Of the following elements, a potential franchisor should be concerned most about
    A.supply chains
    B. renewal and termination terms
    C. hours of (business operation
    D. future Canadian/US dollar exchange rates

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #23
Difficulty: Difficult
Learning Objective: 05-08 Explain how to evaluate a franchise opportunity.
 

24. Franchises with territorial protection
    A.are the most desirable
    B. are increasing in frequency
    C. are generally not possible
    D. are illegal due to non-competition laws

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #24
Difficulty: Medium
Learning Objective: 05-08 Explain how to evaluate a franchise opportunity.
 

25. Becoming a franchisor
    A.is a retirement strategy
    B. is a way of reducing one’s management pressures
    C. is inevitable in a successful business
    D. is a form of entrepreneurship

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #25
Difficulty: Medium
Learning Objective: 05-09 Discuss how to organize a franchising system.
 

26. Secret shoppers
    A.refers to customers who pretend not to be interested in making a purchase
    B. means asking someone else to make your purchase in their name
    C. is a strategy used by some franchisors
    D. are used in by government agencies to detect tax fraud

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #26
Difficulty: Difficult
Learning Objective: 05-09 Discuss how to organize a franchising system.
 

27. Future growth of franchising will
    A.reduce employment numbers
    B. make competition more difficult for small businesses in certain industries
    C. result in less competition
    D. lead to more monopolies

 

Accessibility: Keyboard Navigation
Balderson – Chapter 05 #27
Difficulty: Difficult
Learning Objective: 05-09 Discuss how to organize a franchising system.
 

 

 

c5 Summary

Category	# of Questions
Accessibility: Keyboard Navigation	27
Balderson – Chapter 05	27
Difficulty: Difficult	9
Difficulty: Easy	8
Difficulty: Medium	10
Learning Objective: 05-01 Describe the advantages and disadvantages of purchasing an ongoing business compared with the other methods of small business ownership.	3
Learning Objective: 05-02 Identify the sources of businesses that are for sale.	3
Learning Objective: 05-03 Explain how to evaluate a business that is for sale.	3
Learning Objective: 05-04 Describe the methods used in determining the price to pay for a business.	3
Learning Objective: 05-05 Discuss the significance of franchising in the Canadian economy.	3
Learning Objective: 05-06 Explain the various types of franchises available for small business.	3
Learning Objective: 05-07 List the relative strengths and weaknesses of franchising as a method of starting a small business.	3
Learning Objective: 05-08 Explain how to evaluate a franchise opportunity.	3
Learning Objective: 05-09 Discuss how to organize a franchising system.	3