
Question 1
0.5 out of 0.5 points
All of the following would be considering part of the description of the venture section
of the business plan except:
Selected Answer:
the projected statement of cash flows for the first year.
Answers:
the business location.
the history of the business.
what equipment will be purchased.
the projected statement of cash flows for the first year.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #67
Page: 200

Question 2
0.5 out of 0.5 points
The business plan presentation for potential investors:
Selected
Answer:
should enable the entrepreneur to "sell" his or her business concept in a
designated period of time.
Answers:
should be presented only in writing.
should contain no negative projections.
should enable the entrepreneur to "sell" his or her business concept in a
designated period of time.
should provide the entrepreneur's own perspective.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #51
Page: 187

Question 3
0.5 out of 0.5 points
Which of the following is not true about Steve Hafner featured in the opening profile of
chapter 7?
Selected
Answer:
Founded Expedia early in his career
Answers:
Graduated from Dartmouth College
Founded Expedia early in his career
Worked for Boston Consulting Group after completing his Masters
Degree
Founded Kayak Corporation
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #42
Page: 181-182

Question 4
0 out of 0.5 points
If a venture is not a manufacturing firm, an operations plan is not necessary.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #36
Page: 201

Question 5
0 out of 0.5 points
Since bills have to be paid at different times of the year, cash flow projections should
be presented weekly.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #38
Page: 203

Question 6
0.5 out of 0.5 points
The executive summary section should:
Selected Answer:
be about two to three pages in length.
Answers:
be prepared before the total plan is written.
be about two to three pages in length.
highlight key financial milestones that have been achieved.
try to summarize every section of the plan.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #62
Page: 196

Question 7
0.5 out of 0.5 points
Planning the new venture is a process that never ends.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #2
Page: 182

Question 8
0.5 out of 0.5 points
When determining how much help is needed to write the business plan an entrepreneur
should conduct a self-assessment. In this self-assessment which skill set would not be
considered?
Selected Answer:
venture capital
Answers:
product design
organizing
venture capital
people management
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #45
Page: 184

Question 9
0.5 out of 0.5 points
Standard & Poor's and Bloomberg are good sources of industry and market data.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #21
Page: 191

Question 10
0.5 out of 0.5 points
Which of the following documents is not usually included in the Financial Plan?
Selected Answer:
Price lists from suppliers
Answers:
Statement of cash flows
Income statement
Price lists from suppliers
Projected balance sheet
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #74
Page: 203

Question 11
0.5 out of 0.5 points
___________ is not one of the main perspectives an entrepreneur should consider
when writing the business plan.
Selected Answer:
The employee's perspective
Answers:
The employee's perspective
The marketing perspective
The investor's perspective
The entrepreneurs own perspective
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #47
Page: 185

Question 12
0.5 out of 0.5 points
Before beginning the business plan, the entrepreneur should define the venture's goals
and objectives. These goals should be:
Selected Answer:
feasible.
Answers:
general and broad.
feasible.
guaranteed.
unique.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #52
Page: 190

Question 13
0.5 out of 0.5 points
European online retail sales are expected to continue their double digit growth until 2018.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #27
Page: 194

Question 14
0.5 out of 0.5 points
_____________ are good sources of information for financial and industry operating
ratios.
Selected Answer:
RMA eStatement Studies and BizMiner
Answers:
RMA eStatement Studies and BizMiner
Market Share Reporter and the SBA report
U.S. Census Statistical Abstracts and MarketLine
Encyclopedia for American Industries and Mintel Reports
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #53
Page: 191

Question 15
0.5 out of 0.5 points
When collecting marketing information the entrepreneur should:
Selected
Answer:
identify competitors.
Answers:
not include general environmental information.
start with narrow-based data and work down to a more broader scope
of information.
identify competitors.
not aim to define a specific market.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #58
Page: 191

Question 16
0 out of 0.5 points
The Internet is a useful tool to access information but is generally not a good vehicle
for marketing goods and services.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #28
Page: 194

Question 17
0.5 out of 0.5 points
Which of the following statements is(are) true?
Selected
Answer:
The business plan describes both internal and external elements.
Answers:
The business plan describes both internal and external elements.
The preliminary business plan should be prepared by a lawyer.
Most business plan resources on the Internet are too complex and
expensive to be of use to the new venture.
Once made, a business plan should not be changed.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #43
Page: 183

Question 18
0.5 out of 0.5 points
Which of the following is not a common reason why business plans fail?
Selected Answer:
the promotional strategy was not taken seriously
Answers:
objectives are not measurable
no customer need was established
the entrepreneur has no experience in the planned business
the promotional strategy was not taken seriously
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #79
Page: 206

Question 19
0.5 out of 0.5 points
In preparing the business plan, entrepreneurs can provide their own perspective and
should consider the needs of external sources.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #16
Page: 188

Question 20
0.5 out of 0.5 points
The business plan is designed to guide the entrepreneur:
Selected Answer:
through the first year of operations.
Answers:
through the distribution process.
through the first year of operations.
in the financing process.
in case of a change in ownership.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #75
Page: 204

Question 21
0.5 out of 0.5 points
Venture capitalists demand high rates of return for their investment in the new venture.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #15
Page: 187

Question 22
0.5 out of 0.5 points
All of the following would be an operations information need except:
Selected Answer:
break even numbers.
Answers:
raw materials.
break even numbers.
equipment.
labor skills.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #57
Page: 192

Question 23
0 out of 0.5 points
The entrepreneur need not concentrate on environmental analysis since most of the
external factors are generally uncontrollable.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #34
Page: 197

Question 24
0.5 out of 0.5 points
When evaluating business plans _________ are primarily concerned with the four Cs
of credit.
Selected Answer:
lenders
Answers:
investors
employees
vendors
lenders
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #49
Page: 186

Question 25
0 out of 0.5 points
To maintain objectivity, the business plan should not be written by the entrepreneur.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #4
Page: 184

Question 26
0 out of 0.5 points
Most entrepreneurs have little difficulty with gathering market information.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #20
Page: 190

Question 27
0.5 out of 0.5 points
The process of writing the business plan provides a self-assessment for the
entrepreneur.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #10
Page: 185

Question 28
0 out of 0.5 points
An evaluation of cultural changes is irrelevant to the venture and should not be
included in the business plan.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #32
Page: 197

Question 1
0 out of 0.5 points
The executive summary section of the business plan should be written first, before
other sections are developed.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #30
Page: 195

Question 2
0.5 out of 0.5 points
Investors often place more emphasis on the entrepreneur's _________ than lenders do.
Selected Answer:
character
Answers:
character
experience
financial records
personal viewpoint
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #50
Page: 186

Question 3
0 out of 0.5 points
Since bills have to be paid at different times of the year, cash flow projections should
be presented weekly.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #38
Page: 203

Question 4
0.5 out of 0.5 points
Distribution, pricing, and promotion of the product are discussed in which section of
the plan?
Selected Answer:
Marketing
Answers:
Marketing
Production
Merchandising
Organization
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #71
Page: 202

Question 5
0 out of 0.5 points
To maintain objectivity, the business plan should not be written by the entrepreneur.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #4
Page: 184

Question 6
0 out of 0.5 points
It is recommended that an entrepreneur avoid using the Internet as a resource for
finding information to write a business plan because the information found there is
often incorrect and unreliable.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #18
Page: 189

Question 7
0 out of 0.5 points
The business plan addresses only short term decision making.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #3
Page: 183

Question 8
0 out of 0.5 points
In writing the business plan an entrepreneur should consider four perspectives: the
investor, the customer, the employees and themselves.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #6
Page: 184

Question 9
0.5 out of 0.5 points
The section of the business plan in which the entrepreneur identifies changes occurring
on the national and international level is the:
Selected Answer:
environmental and industry analysis.
Answers:
merchandising plan.
description of the venture.
executive summary.
environmental and industry analysis.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #63
Page: 197

Question 10
0.5 out of 0.5 points
If the new venture is a manufacturing operation a(n) __________ in the business plan
is necessary.
Selected Answer:
production plan
Answers:
ownership plan
quality control plan
production plan
partnership agreement
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #68
Page: 201

Question 11
0 out of 0.5 points
Discussing an exit strategy in the executive summary is not a good idea under any
circumstances.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #35
Page: 197

Question 12
0.5 out of 0.5 points
When evaluating business plans _________ are primarily concerned with the four Cs
of credit.
Selected Answer:
lenders
Answers:
investors
employees
vendors
lenders
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #49
Page: 186

Question 13
0 out of 0.5 points
An evaluation of cultural changes is irrelevant to the venture and should not be
included in the business plan.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #32
Page: 197

Question 14
0.5 out of 0.5 points
Which source of financial information is a compilation of 276,000 financial statements
of banking customers with ratios and benchmarks?
Selected Answer:
RMA eStatement Studies
Answers:
RMA eStatement Studies
Market Share Reporter
U.S. Census Statistical Abstracts
Encyclopedia for American Industries and Mintel Reports
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #56
Page: 191

Question 15
0 out of 0.5 points
The four Cs of credit are computers, capital, compromise, and collateral.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #13
Page: 186

Question 16
0.5 out of 0.5 points
Which of the following is not true about the operations plan portion of the business
plan?
Selected
Answer:
Only service businesses need an operations plan.
Answers:
Only service businesses need an operations plan.
An operations plan describes the flow of goods and services from
production to customer.
The role of technology in the business transaction process is discussed.
The shipping process and inventory control process can be discussed
in this section.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #69
Page: 201-202

Question 17
0.5 out of 0.5 points
A quick feasibility study should be conducted before preparing the business plan to
uncover possible barriers to success.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #17
Page: 188

Question 18
0.5 out of 0.5 points
European online retail sales are expected to continue their double digit growth until 2018.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #27
Page: 194

Question 19
0.5 out of 0.5 points
In preparing the business plan, entrepreneurs can provide their own perspective and
should consider the needs of external sources.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #16
Page: 188

Question 20
0 out of 0.5 points
The business plan is a private document and should not be read by employees and
customers.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #8
Page: 185

Question 21
0 out of 0.5 points
Letters from customers, distributors, or subcontractors are examples of information that
should be included in the executive summary of a business plan.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #39
Page: 204

Question 22
0.5 out of 0.5 points
_______ identifies potential hazards and alternative strategies to meet business plan
goals and objectives.
Selected Answer:
Assessment of risk
Answers:
Assessment of risk
Financial planning
Alternative planning analysis
The financial plan
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #73
Page: 203

Question 23
0.5 out of 0.5 points
The depth and detail of a business plan depend on:
Selected Answer:
the size and scope of the new venture.
Answers:
the target audience.
the size and scope of the new venture.
the experience of the entrepreneur.
the amount of capital needed.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #46
Page: 185

Question 24
0.5 out of 0.5 points
By controlling __________, the firm can ensure maximum service to the customer.
Selected Answer:
inventory
Answers:
production
sales
costs
inventory
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #77
Page: 205

Question 25
0.5 out of 0.5 points
To assess the potential profitability of a venture, the entrepreneur needs to ascertain
expected sales and expense figures for the first:
Selected Answer:
year.
Answers:
month.
year.
quarter.
three years.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #59
Page: 193

Question 26
0 out of 0.5 points
Pro forma financial statements should be prepared semi-monthly for the first year of
the venture.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #24
Page: 193

Question 27
0.5 out of 0.5 points
The introductory page of the business plan should contain the amount of financing
needed.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #31
Page: 196

Question 28
0.5 out of 0.5 points
The executive summary section should:
Selected Answer:
be about two to three pages in length.
Answers:
be prepared before the total plan is written.
be about two to three pages in length.
highlight key financial milestones that have been achieved.
try to summarize every section of the plan.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #62
Page: 196

Question 1
0.5 out of 0.5 points
_____________ are good sources of information for financial and industry operating
ratios.
Selected Answer:
RMA eStatement Studies and BizMiner
Answers:
RMA eStatement Studies and BizMiner
Market Share Reporter and the SBA report
U.S. Census Statistical Abstracts and MarketLine
Encyclopedia for American Industries and Mintel Reports
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #53
Page: 191

Question 2
0.5 out of 0.5 points
Which of the following statements is(are) true?
Selected
Answer:
The business plan describes both internal and external elements.
Answers:
The business plan describes both internal and external elements.
The preliminary business plan should be prepared by a lawyer.
Most business plan resources on the Internet are too complex and
expensive to be of use to the new venture.
Once made, a business plan should not be changed.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #43
Page: 183

Question 3
0.5 out of 0.5 points
All of the following would be considering part of the description of the venture section
of the business plan except:
Selected Answer:
the projected statement of cash flows for the first year.
Answers:
the business location.
the history of the business.
what equipment will be purchased.
the projected statement of cash flows for the first year.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #67
Page: 200

Question 4
0.5 out of 0.5 points
Before writing the business plan an entrepreneur should conduct an objective selfassessment of his or her abilities which includes areas such as planning and sales skills.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #5
Page: 184

Question 5
0.5 out of 0.5 points
European online retail sales are expected to continue their double digit growth until 2018.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #27
Page: 194

Question 6
0.5 out of 0.5 points
Which of the following is not true about Steve Hafner featured in the opening profile of
chapter 7?
Selected
Answer:
Founded Expedia early in his career
Answers:
Graduated from Dartmouth College
Founded Expedia early in his career
Worked for Boston Consulting Group after completing his Masters
Degree
Founded Kayak Corporation
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #42
Page: 181-182

Question 7
0 out of 0.5 points
The entrepreneur need not concentrate on environmental analysis since most of the
external factors are generally uncontrollable.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #34
Page: 197

Question 8
0.5 out of 0.5 points
If the new venture is not a manufacturing operation, but a retail store or service, a new
section of the business plan is required which is called the:
Selected Answer:
operational plan.
Answers:
organizational plan.
operational plan.
production plan.
executive summary.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #70
Page: 202

Question 9
0.5 out of 0.5 points
While preparing the first draft of the business plan, the entrepreneur should not:
Selected
Answer:
take into consideration the constituencies that will ultimately read and
evaluate the plan's feasibility.
Answers:
prepare it from his or her personal viewpoint.
take into consideration the constituencies that will ultimately read and
evaluate the plan's feasibility.
prepare it with an aim to identify possible barriers to success.
try to define the goals and objectives of the venture.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #48
Page: 186

Question 10
0.5 out of 0.5 points
Which of the following documents is not usually included in the Financial Plan?
Selected Answer:
Price lists from suppliers
Answers:
Statement of cash flows
Income statement
Price lists from suppliers
Projected balance sheet
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #74
Page: 203

Question 11
0.5 out of 0.5 points
_______ identifies potential hazards and alternative strategies to meet business plan
goals and objectives.
Selected Answer:
Assessment of risk
Answers:
Assessment of risk
Financial planning
Alternative planning analysis
The financial plan
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #73
Page: 203

Question 12
0.5 out of 0.5 points
When evaluating business plans _________ are primarily concerned with the four Cs
of credit.
Selected Answer:
lenders
Answers:
investors
employees
vendors
lenders
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #49
Page: 186

Question 13
0 out of 0.5 points
The four Cs of credit are computers, capital, compromise, and collateral.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #13
Page: 186

Question 14
0.5 out of 0.5 points
Investors often place more emphasis on the entrepreneur's _________ than lenders do.
Selected Answer:
character
Answers:
character
experience
financial records
personal viewpoint
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #50
Page: 186

Question 15
0.5 out of 0.5 points
Which of the following is not a common reason why business plans fail?
Selected Answer:
the promotional strategy was not taken seriously
Answers:
objectives are not measurable
no customer need was established
the entrepreneur has no experience in the planned business
the promotional strategy was not taken seriously
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #79
Page: 206

Question 16
0.5 out of 0.5 points
Venture capitalists demand high rates of return for their investment in the new venture.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #15
Page: 187

Question 17
0 out of 0.5 points
In the business plan the entrepreneur should address the needs of the entrepreneur and
the needs of the market; the investor's perspective is not important.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #9
Page: 185

Question 18
0.5 out of 0.5 points
Which of the following interested parties should not have access to the venture's
business plan?
Selected Answer:
Competitors
Answers:
Competitors
Lenders
Investors
Suppliers
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #44
Page: 185

Question 19
0 out of 0.5 points
To maintain objectivity, the business plan should not be written by the entrepreneur.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #4
Page: 184

Question 20
0.5 out of 0.5 points
A quick feasibility study should be conducted before preparing the business plan to
uncover possible barriers to success.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #17
Page: 188

Question 21
0.5 out of 0.5 points
All of the following are questions that should be considered in the environmental and
industry analysis section of the business plan except:
Selected Answer:
What is my promotional strategy?
Answers:
What are total industry sales over the past five years?
Who are the nearest competitors?
What is my promotional strategy?
What is anticipated growth in this industry?
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #65
Page: 197-198

Question 22
0.5 out of 0.5 points
Investors often spend a lot of time conducting background checks.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #14
Page: 186

Question 23
0.5 out of 0.5 points
The tendency among many entrepreneurs is to:
Selected Answer:
avoid planning.
Answers:
avoid planning.
not take initiative.
not market their product or services.
lose focus on the business plan.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #76
Page: 205

Question 24
0 out of 0.5 points
The best way to address the concerns of all potential audiences when writing the
business plan is to rely exclusively on a computer software package.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #11
Page: 186

Question 25
0.5 out of 0.5 points
Distribution, pricing, and promotion of the product are discussed in which section of
the plan?
Selected Answer:
Marketing
Answers:
Marketing
Production
Merchandising
Organization
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #71
Page: 202

Question 26
0.5 out of 0.5 points
Which of the following is not true about the operations plan portion of the business
plan?
Selected
Answer:
Only service businesses need an operations plan.
Answers:
Only service businesses need an operations plan.
An operations plan describes the flow of goods and services from
production to customer.
The role of technology in the business transaction process is discussed.
The shipping process and inventory control process can be discussed
in this section.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #69
Page: 201-202

Question 27
0.5 out of 0.5 points
To determine the figures in the budget, the entrepreneur should identify benchmarks or
norms in the industry.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #23
Page: 193

Question 28
0.5 out of 0.5 points
The part of the plan that describes the location and size of the business, the personnel
and office equipment that will be needed, and the history of the venture is called the:
Selected Answer:
description of the venture.
Answers:
organizational plan.
description of the venture.
production plan.
executive summary.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #66

Question 1
0.5 out of 0.5 points
All of the following are questions that should be considered in the environmental and
industry analysis section of the business plan except:
Selected Answer:
What is my promotional strategy?
Answers:
What are total industry sales over the past five years?
Who are the nearest competitors?
What is my promotional strategy?
What is anticipated growth in this industry?
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #65
Page: 197-198

Question 2
0 out of 0.5 points
Most entrepreneurs have little difficulty with gathering market information.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #20
Page: 190

Question 3
0.5 out of 0.5 points
Which of the following statements is(are) true?
Selected
Answer:
The business plan describes both internal and external elements.
Answers:
The business plan describes both internal and external elements.
The preliminary business plan should be prepared by a lawyer.
Most business plan resources on the Internet are too complex and
expensive to be of use to the new venture.
Once made, a business plan should not be changed.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #43
Page: 183

Question 4
0.5 out of 0.5 points
Which of the following is not a part of the introductory page?
Selected Answer:
the names and addresses of all managers
Answers:
the name and address of the company
statement of confidentiality
amount of financing needed
the names and addresses of all managers
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #61
Page: 196

Question 5
0.5 out of 0.5 points
By controlling __________, the firm can ensure maximum service to the customer.
Selected Answer:
inventory
Answers:
production
sales
costs
inventory
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #77
Page: 205

Question 6
0.5 out of 0.5 points
The tendency among many entrepreneurs is to:
Selected Answer:
avoid planning.
Answers:
avoid planning.
not take initiative.
not market their product or services.
lose focus on the business plan.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #76
Page: 205

Question 7
0.5 out of 0.5 points
The business plan is designed to guide the entrepreneur:
Selected Answer:
through the first year of operations.
Answers:
through the distribution process.
through the first year of operations.
in the financing process.
in case of a change in ownership.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #75
Page: 204

Question 8
0.5 out of 0.5 points
______ control compares the cost figures estimated in the business plan with actual
day-to-day operations costs.
Selected Answer:
Production
Answers:
Production
Sales
Inventory
Costs
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #78
Page: 205

Question 9
0.5 out of 0.5 points
The depth and detail of a business plan depend on:
Selected Answer:
the size and scope of the new venture.
Answers:
the target audience.
the size and scope of the new venture.
the experience of the entrepreneur.
the amount of capital needed.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #46
Page: 185

Question 10
0.5 out of 0.5 points
The usefulness of the title or introductory page is:
Selected Answer:
that it provides information about the company.
Answers:
that it provides information about the company.
such that it requires several pages.
questionable, especially to investors.
that it contains backup data.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #60
Page: 196

Question 11
0.5 out of 0.5 points
Revenue sources such as sales and any externally available funds should be included in
the budget.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #25
Page: 193

Question 12
0.5 out of 0.5 points
_____________ are good sources of information for financial and industry operating
ratios.
Selected Answer:
RMA eStatement Studies and BizMiner
Answers:
RMA eStatement Studies and BizMiner
Market Share Reporter and the SBA report
U.S. Census Statistical Abstracts and MarketLine
Encyclopedia for American Industries and Mintel Reports
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #53
Page: 191

Question 13
0.5 out of 0.5 points
_______ identifies potential hazards and alternative strategies to meet business plan
goals and objectives.
Selected Answer:
Assessment of risk
Answers:
Assessment of risk
Financial planning
Alternative planning analysis
The financial plan
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #73
Page: 203

Question 14
0 out of 0.5 points
If a venture is not a manufacturing firm, an operations plan is not necessary.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #36
Page: 201

Question 15
0.5 out of 0.5 points
To determine the figures in the budget, the entrepreneur should identify benchmarks or
norms in the industry.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #23
Page: 193

Question 16
0 out of 0.5 points
Letters from customers, distributors, or subcontractors are examples of information that
should be included in the executive summary of a business plan.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #39
Page: 204

Question 17
0.5 out of 0.5 points
When evaluating business plans _________ are primarily concerned with the four Cs
of credit.
Selected Answer:
lenders
Answers:
investors
employees
vendors
lenders
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #49
Page: 186

Question 18
0.5 out of 0.5 points
Venture capitalists demand high rates of return for their investment in the new venture.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #15
Page: 187

Question 19
0.5 out of 0.5 points
When collecting marketing information the entrepreneur should:
Selected
Answer:
identify competitors.
Answers:
not include general environmental information.
start with narrow-based data and work down to a more broader scope
of information.
identify competitors.
not aim to define a specific market.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #58
Page: 191

Question 20
0 out of 0.5 points
The business plan does not help an entrepreneur to obtain financing.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #12
Page: 186

Question 21
0 out of 0.5 points
It is recommended that an entrepreneur avoid using the Internet as a resource for
finding information to write a business plan because the information found there is
often incorrect and unreliable.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #18
Page: 189

Question 22
0.5 out of 0.5 points
Standard & Poor's and Bloomberg are good sources of industry and market data.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #21
Page: 191

Question 23
0 out of 0.5 points
Since bills have to be paid at different times of the year, cash flow projections should
be presented weekly.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #38
Page: 203

Question 24
0.5 out of 0.5 points
In preparing the business plan, entrepreneurs can provide their own perspective and
should consider the needs of external sources.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #16
Page: 188

Question 25
0 out of 0.5 points
Discussing an exit strategy in the executive summary is not a good idea under any
circumstances.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #35
Page: 197

Question 26
0.5 out of 0.5 points
Steve Hafner founded Orbitz travel before founding Kayak a company that allows the
user to view opportunities from multiple travel sites such as Orbitz, Expedia, and
Priceline.
Selected Answer: True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #1
Page: 181

Question 27
0 out of 0.5 points
The Internet is a useful tool to access information but is generally not a good vehicle
for marketing goods and services.
Selected Answer: True
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #28
Page: 194

Question 28
0.5 out of 0.5 points
Which of the following is not true about Steve Hafner featured in the opening profile of
chapter 7?
Selected
Answer:
Founded Expedia early in his career
Answers:
Graduated from Dartmouth College
Founded Expedia early in his career
Worked for Boston Consulting Group after completing his Masters
Degree
Founded Kayak Corporation
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #42
Page: 181-18

Question 1
4 out of 4 points
Distribution, pricing, and promotion of the product are discussed in which section of
the plan?
Selected Answer:
Marketing
Answers:
Marketing
Production
Merchandising
Organization
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #71
Page: 202

Question 2
4 out of 4 points
The business plan does not help an entrepreneur to obtain financing.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #12
Page: 186

Question 3
4 out of 4 points
Which source of financial information is a compilation of 276,000 financial statements
of banking customers with ratios and benchmarks?
Selected Answer:
RMA eStatement Studies
Answers:
RMA eStatement Studies
Market Share Reporter
U.S. Census Statistical Abstracts
Encyclopedia for American Industries and Mintel Reports
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Hard
Hisrich - Chapter 07 #56
Page: 191

Question 4
4 out of 4 points
It is recommended that an entrepreneur avoid using the Internet as a resource for
finding information to write a business plan because the information found there is
often incorrect and unreliable.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #18
Page: 189

Question 5
4 out of 4 points
Most entrepreneurs have little difficulty with gathering market information.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #20
Page: 190

Question 6
4 out of 4 points
An evaluation of cultural changes is irrelevant to the venture and should not be
included in the business plan.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #32
Page: 197

Question 7
4 out of 4 points
The business plan addresses only short term decision making.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #3
Page: 183

Question 8
0 out of 4 points
Facebook is a good source of market information on competitors.
Selected Answer:
False
Answers:
True
False
Response Feedback:
incorrect
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #29
Page: 194

Question 9
4 out of 4 points
The process of writing the business plan provides a self-assessment for the
entrepreneur.
Selected Answer:
True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #10
Page: 185

Question 10
4 out of 4 points
The business plan is designed to guide the entrepreneur:
Selected Answer:
through the first year of operations.
Answers:
through the distribution process.
through the first year of operations.
in the financing process.
in case of a change in ownership.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #75
Page: 204

Question 11
4 out of 4 points
Before writing the business plan an entrepreneur should conduct an objective selfassessment of his or her abilities which includes areas such as planning and sales skills.
Selected Answer:
True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #5
Page: 184

Question 12
4 out of 4 points
The organizational plan section of the business plan should describe the venture's form
of ownership.
Selected Answer:
True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #37
Page: 202

Question 13
4 out of 4 points
The executive summary section should:
Selected Answer:
be about two to three pages in length.
Answers:
be prepared before the total plan is written.
be about two to three pages in length.
highlight key financial milestones that have been achieved.
try to summarize every section of the plan.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #62
Page: 196

Question 14
4 out of 4 points
The business plan presentation for potential investors:
Selected
Answer:
Answers:
should enable the entrepreneur to "sell" his or her business concept in a
designated period of time.
should be presented only in writing.
should contain no negative projections.
should enable the entrepreneur to "sell" his or her business concept in a
designated period of time.
should provide the entrepreneur's own perspective.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #51
Page: 187

Question 15
4 out of 4 points
Which of the following interested parties should not have access to the venture's
business plan?
Selected Answer:
Competitors
Answers:
Competitors
Lenders
Investors
Suppliers
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #44
Page: 185

Question 16
4 out of 4 points
The executive summary section is only meant to highlight key factors and motivate the
person holding the plan to read it in its entirety.
Selected Answer:
True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #33
Page: 197

Question 17
4 out of 4 points
The business plan is a private document and should not be read by employees and
customers.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #8
Page: 185

Question 18
4 out of 4 points
Steve Hafner founded Orbitz travel before founding Kayak a company that allows the
user to view opportunities from multiple travel sites such as Orbitz, Expedia, and
Priceline.
Selected Answer:
True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #1
Page: 181

Question 19
4 out of 4 points
To maintain objectivity, the business plan should not be written by the entrepreneur.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #4
Page: 184

Question 20
4 out of 4 points
In writing the business plan an entrepreneur should consider four perspectives: the
investor, the customer, the employees and themselves.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #6
Page: 184

Question 21
4 out of 4 points
Pro forma financial statements should be prepared semi-monthly for the first year of
the venture.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #24
Page: 193

Question 22
4 out of 4 points
Before beginning the business plan, the entrepreneur should define the venture's goals
and objectives. These goals should be:
Selected Answer:
feasible.
Answers:
general and broad.
feasible.
guaranteed.
unique.
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #52
Page: 190

Question 23
4 out of 4 points
Since bills have to be paid at different times of the year, cash flow projections should
be presented weekly.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #38
Page: 203

Question 24
4 out of 4 points
The entrepreneur need not concentrate on environmental analysis since most of the
external factors are generally uncontrollable.
Selected Answer:
Answers:
False
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Easy
Hisrich - Chapter 07 #34
Page: 197

Question 25
4 out of 4 points
European online retail sales are expected to continue their double digit growth until 2018.
Selected Answer:
True
Answers:
True
False
Response Feedback:
correct
Accessibility: Keyboard Navigation
Difficulty: Medium
Hisrich - Chapter 07 #27
Page: 194