Week 6 Business Pre- test
1. What do franchisees typically have to pay to the franchisor?
Choose one answer.
a. a one-time franchise fee
b. monthly royalties based on sales
c. nominal fee for business knowledge
d. approximately half of the franchise's profits each month
e. one-time franchise fee and monthly royalties based on sales
2. When a firm's expenses are greater than its sales revenue, the firm has a _____.
Choose one answer.
a. profit
b. loss
c. negative cash flow
d. planned economy
e. market economy
3. When interviewing you for an entry-level management position, recruiters will often ask you to
describe a problem that you have encountered and how you solved that problem. These
recruiters are primarily assessing your ____ skills.
Choose one answer.
a. oral communication
b. written communication
c. leadership
d. critical-thinking
e. technical
4. If the United States exports $100 worth of diamonds to the Kingdom of Mocha and imports $80
worth of bows and arrows, it has a/an _____.
Choose one answer.
a. unfavorable balance of trade
b. trade deficit
c. trade surplus
d. negative cash flow
e. export slide
5. The process of spreading the cost of a fixed asset over the asset's useful life is called _____.
Choose one answer.
a. expensing
b. depreciation
c. apportioning
d. crediting
e. distributing
6. The Dress Barn offered its customers a reduction in price on some clothing items that were
slightly faded from being in the window at the front of the store. This reduction is called a
_____.
Choose one answer.
a. cost of goods sold
b. sales allowance
c. sales return
d. sales discount
e. sales bargain
7. Greer, Inc. is developing a marketing information system to try to improve its marketing efforts.
Internal sources of marketing data the company could incorporate in the MIS include all except
which of the following?
Choose one answer.
a. sales forecasts
b. economic conditions
c. inventory levels
d. purchase requests
e. prices of products
8. Ruby Tuesday wants to send a letter to all of the winners of its recent free-lunch promotion, but
the manager wants all the letters to be personalized. What type of software will be most
efficient in creating personalized letters for each of the fifty winners?
Choose one answer.
a. spreadsheet
b. desktop publishing
c. accounting
d. communications
e. word processing
9. One of the most significant issues of online retailing is _____.
Choose one answer.
a. domain names
b. design of websites
c. direct selling
d. advertising
e. security
10. Statistically, approximately what percentage of all new businesses can be expected to fail within
their first seven years?
Choose one answer.
a. 10
b. 25
c. 50
d. 31
e. 70
11. A business will usually choose to produce a new product in an existing facility if the cost is less
than the cost of building a new one and the
Choose one answer.
a. type of technology needed for the new product is the same as the technology used
by the existing products.
b. new product is an extension of an existing product line already produced in the
factory.
c. human resources requirement for the new product and existing products can be
satisfied with the facility's current employees.
d. product design is already completed.
e. existing factory has enough capacity to handle demand for the new product as well
as the existing products.
12. When is it estimated that there will be over 2 billion Internet users worldwide?
Choose one answer.
a. 2009 or 2010
b. 2011 or 2012
c. 2013 or 2014
d. 2015 or 2014
e. 2017 or 2018
13. All of the following except which are characteristics of the introduction stage of the product life
cycle?
Choose one answer.
a. usually a low profit or even a loss
b. the appearance on the market of refinements or extensions of the original product
c. relatively few competitors
d. often a high price
e. low consumer awareness and acceptance of the product
14. Sally Overall is thinking about two different decisions. One decision is quite risky, while the other
decision is more conservative. To help her make the right decision, she decides to calculate the
_____.
Choose one answer.
a. quick ratio
b. management analysis
c. money factor
d. risk-return ratio
e. entrepreneurial ratio
15. A statement that projects income and/or expenditures over a specified future period is called a
_____.
Choose one answer.
a. financial plan
b. cash flow plan
c. resources plan
d. resource allocation statement
e. budget
16. Needles, Inc. has five of its ten products at the end of the product life cycle. To maintain its
market share, the firm must at least find ways to
Choose one answer.
a. reduce the cost of marketing its products.
b. cut manufacturing costs.
c. extend or refine the want-satisfying capability of its products.
d. reduce the number of employees.
e. increase the price of the product.
17. Laura wants to start a business, but she is unsure of the legal form best for her. Short of cash,
she has decided to take the form that is the least expensive and most flexible in terms of
decision making and implementation. Which would you recommend?
Choose one answer.
a. joint venture
b. partnership
c. sole proprietorship
d. cooperative
e. corporation
18. Rosalea recently switched careers. Previously, she was a college professor, but she felt she
needed more real-world experience to help her business students more fully. She became a
manager at Dazzle Magazine, where she was in charge of the layout. Always open to new ways
of doing things, Rosalea let her staff implement their ideas at times. Rosalea learned firsthand
the different roles she had to play as a manager.
It always got stressful when the publication deadline neared. At one point, there was a major
mix-up in the layouts for the front cover. Rosalea was not sure of the correct layout because she
had allowed one of her employees, Joseph, to modify and run with his idea on this matter.
However, she could not ask for Joseph's help with the covers because he happened to be out of
town at the time. Rosalea quickly looked over the layouts but felt that they still needed some
work. She decided to ask the design manager for her help. The design manager did not feel
comfortable making a decision on the issue, so she did not give Rosalea an answer. Rosalea then
went to an employee within her department for advice. That employee suggested some ideas,
but Rosalea was still not satisfied. Finally, Rosalea called one of her top graduate students with
whom she had kept in contact and asked her if she could offer some ideas. The graduate
student quickly came to the magazine's office and helped Rosalea decide on the alternative that
should be implemented. Rosalea greatly appreciated the assistance and the suggestion. The
final cover design went to press, and that issue of the magazine was successful. This helped
Rosalea realize that considering the big picture was good, but equally important were the little
details.
Refer to Dazzle Magazine. The graduate student's assistance represents which step of the
decision-making process?
Choose one answer.
a. evaluate solution
b. generate many alternatives
c. identify problem and opportunity
d. select alternative
e. implement solution
19. The Internet is
Choose one answer.
a. a computerized phone book.
b. a computerized address book for businesses in the United States.
c. a worldwide network of computers linked together through telecommunications.
d. inaccessible unless you are a business owner or government employee.
e. a new version of an electronic game.
20. To compare the productivity of the United States to that of Japan, one should examine their
respective ____.
Choose one answer.
a. defense budgets
b. trade deficits
c. gross domestic products
d. stock markets' performance
e. consumer price indices
21. McLane Distributors, a wholesaler, buys large quantities of health and beauty care products,
light bulbs, batteries, canned food, computer disks, and more and sells them to retailers.
McLane is a/an _____ wholesaler.
Choose one answer.
a. agent
b. limited-line
c. selected merchandise
d. specialty-line
e. general merchandise
22. GRI management has decided to reinvent the culture of the organization. Previously, the
company tried to make jobs more appealing by adding more responsibilities to each job
description. However, this did not work. Next, the company decided to add flextime. It believed
that this would make employees more dedicated. GRI then introduced even more work options
for employees. For example, management decided to group all full-time employees into teams
to allow employees with different backgrounds to learn from each other. Many different kinds
of teams were allowed, as long as the group members did not interact via the Internet or any
other electronic means. The managers reasoned that team members must work face to face to
learn from and truly engage with each other. Once these teams were formed, GRI management
noticed that the quality of employees' work was much improved. The managers also observed
that people felt much more comfortable with, and tolerant of, each other. Refer to Gina
Robinson, Inc. What type of team did GRI management specifically restrict?
Choose one answer.
a. virtuoso team
b. problem-solving team
c. virtual team
d. cross-functional team
e. self-managed team
23. For a cultural diversity program to be successful, it is essential that
Choose one answer.
a. the employees themselves initiate the program.
b. it be given a set time frame in which to show positive results.
c. those who participate get a pay bonus for taking time out of their normal work
schedule to participate.
d. it has a strong, sustained commitment from top leadership.
e. it be unstructured and free-flowing so that employees feel free to say whatever is on
their minds.
24. Getting the total of cash, marketable securities, and receivables and then dividing that total by
the current liabilities results in the _____.
Choose one answer.
a. debt-to-equity ratio
b. debt-to-assets ratio
c. current ratio
d. acid-test ratio
e. inventory turnover
25. If Home Depot, Delta Faucets, and Armstrong Floor Coverings pay for a television show about
remodeling a kitchen on the Home and Garden Network, these companies are ____ the show.
Choose one answer.
a. buying time spots for
b. purchasing network time for
c. creating infomercials for
d. sponsoring
e. advertising
26. Razor Company's blades are in the maturity stage of the product life cycle. How can the
company strengthen its market share?
Choose one answer.
a. eliminate less profitable versions of the product
b. redesign the packaging
c. make no style changes
d. emphasize customer service
e. watch for the early buying patterns
27. Corporate officers are
Choose one answer.
a. listed in the corporate charter.
b. elected by stockholders.
c. appointed by the board of directors.
d. appointed by management.
e. elected by incorporators.
28. When Microsoft copyrighted its Windows software, it established a/an ____ monopoly.
Choose one answer.
a. domestic
b. international
c. legal
d. natural
e. unnatural
29. The process of shipping fresh flowers from California to Texas gives ____ utility to the flowers.
Choose one answer.
a. form
b. time
c. place
d. possession
e. very little
30. Consumer products can be divided into the following three categories:
Choose one answer.
a. convenience, shopping, and business.
b. shopping, convenience, and specialty.
c. convenience, component, and accessory.
d. shopping, component, and specialty.
e. business, specialty, and shopping.
31. When a coffee chain in Chicago purchases coffee from Colombia, South America, it
Choose one answer.
a. is importing the coffee.
b. is exporting the coffee.
c. has an absolute advantage.
d. is decreasing the balance-of-trade deficit.
e. is making a big mistake.
32. The types of planned shopping centers are
Choose one answer.
a. neighborhood, convenience, or regional.
b. convenience, community, or neighborhood.
c. community, regional, or national.
d. regional, community, neighborhood, lifestyle.
e. international, neighborhood, or national.
33. Schluster Hardware, Inc., had a gross profit of $380,000, operating expenses of $210,000, and
income taxes of $48,000. What is Schlusters net income after taxes?
Choose one answer.
a. $122,000
b. $80,000
c. $208,000
d. $170,000
e. $332,000
34. All of the following would typically be considered consumer products except a _____.
Choose one answer.
a. 2-liter of Coke
b. DVD player
c. prom dress
d. high-powered drill press
e. bag of dog food
35. Computers and software belong to which of the following specialized e-business resources?
Choose one answer.
a. human
b. financial
c. material
d. informational
e. digital
36. Intel decides to issue new stock in order to build a new facility and expand its operations. The
receipt of cash from this stock issue would appear in the ____ section of the statement of cash
flows.
Choose one answer.
a. operating
b. business
c. equity
d. investing
e. financing
37. By holding focus groups with employees, Robert Keening of Snow Bird Airlines is employing
which aspect of total quality management?
Choose one answer.
a. democratic leadership
b. reaching consensus
c. customer satisfaction
d. obtaining feedback
e. employee participation
38. All of the following except which are accurate statements about the expectancy theory?
Choose one answer.
a. It is easy to apply.
b. There are various reasons why employees work.
c. The reasons people work may change.
d. It is necessary to show employees how to attain the outcomes they desire.
e. It is a very complex model of motivation
39. For which advertising medium is the most money spent?
Choose one answer.
a. Television
b. Radio
c. Newspapers
d. Magazines
e. Yellow pages
40. An analyst in the corporate finance department at Chase Manhattan Bank has been assigned to
an interdepartmental project involving a major client. He must report to two different
supervisors¾the project manager and the manager of his department. This sort of
organizational structure is called a ____ structure.
Choose one answer.
a. cluster
b. matrix
c. bureaucratic
d. functional
e. hybrid
41. Regina worked hard and successfully as a salesperson for B&J Realty Company. For the past
three years, she surpassed her peers in quality and quantity of sales. Yet in comparing pay, she
discovered that she makes less than two salespeople who are well liked by management.
Consequently, she accepted a higher-paying job with B&J's top competitor. To avoid losing other
salespeople like Regina, management should understand and apply _____.
Choose one answer.
a. Herzberg's theory
b. the expectancy theory
c. the equity theory
d. negative reinforcement
e. Theory Y
42. Procter & Gamble purchased NIOXIN Research Labs, Inc., a leader in the scalp care part of the
profession hair care category. NIOXIM offers a range of innovative products that are distributed
in over 40 countries. This purchase was part of Procter & Gamble's overall ____ to focus on
faster growing, high margin businesses.
Choose one answer.
a. policy
b. tactical plan
c. operational plan
d. strategy
e. standard operating procedures
43. What are the three sets of factors that influence the standards of behavior in an organization?
Choose one answer.
a. organizational norms, circumstances, morals
b. peer pressure, attitudes, social factors
c. historical factors, management attitudes, opportunity
d. opportunity, individual factors, social factors
e. financial factors, opportunity, morals
44. Reagan purchases a corporate bond from Mattel. On the bond it states that Reagan will receive
her money back on February 15, 2022. This is the bond's ____ date.
Choose one answer.
a. declaration
b. maturity
c. conversion
d. redemption
e. expiration
45. Which of the following is not a public relations tool?
Choose one answer.
a. Press conference
b. News release
c. Sponsorship program
d. Trade show
e. Captioned photograph
46. A single marketing mix consists of one type of product with little or no variation, one price, one
promotional program aimed at everyone, and ____ distribution system(s) to reach all customers
in the total market.
Choose one answer.
a. five
b. four
c. three
d. two
e. one
47. As a manager at Johnson Electric, an armature motor manufacturer, Charles is responsible for
quality. As he carries out his controlling function, Charles sets the standard for the number of
defective parts per million, and then he gathers the data measuring the actual performance.
What third step of the control function should Charles take next?
Choose one answer.
a. change the standards to match the actual performance
b. determine the cause of the discrepancy
c. begin planning again
d. take corrective action
e. motivate his employees
48. Under Herzberg's theory, when ____ factors are present in the work environment, they act as
satisfiers; when ____ factors are absent, they act as dissatisfiers.
Choose one answer.
a. Theory X; Theory Y
b. motivation; hygiene
c. physiological; self-realization
d. Theory Y; Theory X
e. hygiene; motivation
49. A large restaurant with locations throughout the United States has a long-term partnership with
Tyson for its poultry and a produce distributor for its fruits and vegetables. These relationships
reduce inefficiencies and costs and result in higher customer satisfaction. This restaurant is
successfully using _____.
Choose one answer.
a. exclusive distribution
b. vertical channel integration
c. supply chain management
d. intensive distribution
e. wholesale intermediaries
50. Which organization issues management, marketing, and technical publications of interest to
present and prospective small-business managers that can be obtained from the U.S.
Government Printing Office?
Choose one answer.
a. SBI
b. SBIC
c. SEC
d. SBA
e. SBDC