Summative Assessment Bank
1. You have been given startup money to start your own business selling
pet supplies. Write your mission statement.
Answers will vary. Required: (1) Start with “To,” (2) Be brief,
preferably one sentence and (3) Be broad
b 2. When conducting a market analysis you should forecast the next
a. 1 to 3 years
b. 3 to 5 years
c. 5 to 8 years
d. 8 to 10 years
3. Kyle is composing a business plan for his new venture. Kyle plans to
market and sell air fresheners. Kyle has identified the following customer
base: women, dog owners, teenage girls, cleaning industry and single
men. Identify the problem with his customer base and explain.
Large customer base, Kyle should focus on a narrower
customer base. For example, Kyle could produce strong air
fresheners and target pet owners and the cleaning industry.
Another example: Kyle can produce beautiful long lasting
scents and target housewives, and single men.
c 4. New small businesses should design a __________ business
structure.
a. bureaucratic
b. hierarchical
c. learning-based
d. none of the above
d 5. Management profiles do NOT include which of the following:
a. a list of community relations
b. a description of their function in an organization
c. a list of industry relations
d. a description of family
b 6. With what office do you register your business name?
a. Office of Comptroller
b. Secretary of State
c. Small Business Administration
d. Courthouse
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7. Circle the appropriate answers.
Site locators can increase/decrease your ability to promote your
business and being successful.
Increase
8. You have employed a marketing firm to provide you with a report about
the desirability of one of your products. Analyze the following results and
recommend improvements, if any.
Product: Greener Grass Formula
Percent of Women participated: 57%
Percent of Men participated: 43%
Percent of people who lived in a house: 45%
Percent of people who lived on a farm: 8%
Percent of people who lived in an apartment: 47%
Percent of South Carolina Residents: 12%
Percent of New Yorker Residents: 28%
Percent of Georgia Residents: 30%
Percent of Nevada Residents: 14%
Percent of Ohio: 16%
Answers will vary. Sample analysis: The sample included
more women than men. The survey should have targeted
more men because they tend to maintain the lawn more than
women. The study had a lot of respondents from residents in
apartments. The survey should have excluded those
respondents and try to capture those who have take care of a
lawn. The study fairly represented the east, central, and west
parts of the US. However, there were a lot of New York
residents, who more than most likely contributed to the high
percentage of people living in apartments. More domesticated
states should have targeted.
9. Describe groupthink in your own words and give an example of when
you were in a situation that involved groupthink.
Answers will vary.
b 10. All of the following are acceptable prevention techniques to avoid
groupthink EXECPT
a. trained facilitator
b. personality tests
c. devils advocate
d. comparing responses from multiple focus group sessions
1. Charity is an activity or gift which benefits the public at large.
2. List three ways a business can donate to a charity.
Donations, sponsorships, grants, partnerships, foundations and
proceed oriented fundraising
3. Grants are large amounts of money donated to deserving individuals or
organizations which have been through a rigorous application process.
4. What are the three categories of foundations?
Independent, corporate and community
5. Businesses should keep up-to-date records of their charitable
donations.
6. The donations a business makes can be considered a tax deduction.
a 1. Rent is an example of a __________ expense.
a. fixed
b. variable
b 2. Gross income is the amount of income after the cost of goods and
taxes are deducted.
a. true
b. false
b 3. Net worth = assets — liabilities
a. true
b. false
4. The two basic parts of a budget are income and expenses.
5. Define budgeting.
The allocation of monetary funds based on a determined
Structure
6. List three reasons for budgeting.
Provide company or personal financial stability, generate a
map of financial practices, guide efficient business decisions,
establish a profit or projected goal, control expenses, debt or
liabilities or prepare for emergencies and savings
7. List two examples of assets.
cash, equipment or buildings
8. List two examples of liabilities.
equipment loans, charge accounts or rental fees
9. Why is it important to know the net worth of a business?
Knowing a business net worth allows you to assess a
business’ financial strength.
1. Ethics are guidelines for human behavior.
2. A code of ethics is a set of ethical behavior guidelines.
3. List three examples of ethical financial issues.
Insider trading, investment management, fraudulent financial
dealings, confidentiality, misappropriation of funds, insurance
fraud, mail and wire fraud
4. Confidentiality ensures information is available only to those authorized
to have access.
5. Spending company money to purchase goods for use is called
embezzlement.
6. List two types of insurance fraud.
Falsifying theft reports, arson, staged auto accidents, worker’s
compensation fraud, insurance agent fraud, phantom repairs and
estimates or owning multiple policies