SBE 100/sec. 1300 - fall 2016 - revew for quiz 4 - chapters 10-12 - Professor Tepfer 

MULTIPLE CHOICE.  Choose the one alternative that best completes the statement or answers the question. 

1) 

According to the textbook, many entrepreneurs go about the task of raising capital haphazardly because 

1) 

_______ 

A) 

they are uncomfortable talking about money and they haven't written a business plan 

B) 

they haven't completed a feasibility analysis or business plan 

C) 

they are intimidated by the process and they are unsure of how much money they need 

D) 

they lack experience in this area and because they don't know much about their choices 

E) 

they are focused on the nuts and bolts of starting their business 

Page Ref 321 

2) 

The three reasons startups need funding are 

2) 

_______ 

A) 

cash flow challenges, capital investments, and lengthy product development cycles 

B) 

attorney fees, capital investments, and marketing research 

C) 

business research, cash flow challenges, and costs associated with building a brand 

D) 

bonuses for members of the new venture team, attorney fees, and lengthy product development cycles 

E) 

bonuses for members of the new venture team, marketing research, and personnel costs 

Page Ref 321 

3) 

Peter Simmons owns an electronic games company. Although Peter's game designers and programmers are very good, it takes 2-3 years to develop a good electronic game. This example illustrates the need for funding or financing referred to as 

3) 

_______ 

A) 

cash flow challenges 

B) 

marketing costs 

C) 

personnel costs 

D) 

lengthy product development cycles 

E) 

costs associated with building a brand 

Page Ref 322 

4) 

In startup firms, inventory must be purchased, employees must be trained and paid, and advertising must be paid for before cash is generated from sales. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example? 

4) 

_______ 

A) 

marketing costs 

B) 

lengthy product development cycles 

C) 

personnel costs 

D) 

capital investments 

E) 

cash flow challenges 

Page Ref 321 

5) 

For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons that motivate firms to seek funding or financing is illustrated in this example? 

5) 

_______ 

A) 

lengthy product development cycles 

B) 

costs associated with building a brand 

C) 

personnel costs 

D) 

cash flow challenges 

E) 

capital investments 

Page Ref 322 

6) 

According to our textbook, the seed money that gets a company off the ground typically comes from 

6) 

_______ 

A) 

commercial banks 

B) 

angel investors 

C) 

the founders of the firm 

D) 

governmental agencies 

E) 

venture capitalists 

Page Ref 323 

7) 

According to the textbook, beyond their own funds, the second source of funds for many new ventures is 

7) 

_______ 

A) 

government grants 

B) 

venture capital 

C) 

friends and family 

D) 

banks 

E) 

business angels 

Page Ref 323 

8) 

Equity financing (or funding) means 

8) 

_______ 

A) 

exchanging partial ownership in a firm, usually in the form of stock, for funding 

B) 

getting a loan guarantee 

C) 

getting a grant or outright gift 

D) 

getting a loan 

E) 

getting a lease 

Page Ref 325 

9) 

The three most common forms of equity funding are 

9) 

_______ 

A) 

initial public offerings, business angels, venture capitalists 

B) 

SBIR grants, venture capital, initial public offerings 

C) 

friends and family, business angels, bootstrapping 

D) 

SBIR grants, SBA guaranteed loans, bank loans 

E) 

friends and family, venture capital, bank loans 

Page Ref 325 

10) 

Debt financing involves 

10) 

______ 

A) 

getting a loan or raising venture capital 

B) 

selling corporate bonds or selling stock via an IPO 

C) 

raising venture capital or securing a private placement 

D) 

getting a loan or selling corporate bonds 

E) 

getting a grant or selling corporate bonds 

Page Ref 336 

11) 

Historically, commercial banks 

11) 

______ 

A) 

have not funded startup firms at all 

B) 

have been a good source of funds for service firm startups but not for manufacturing firm startups 

C) 

have been a good source of funds for manufacturing firm startups but not for service firm startups 

D) 

have been a good source of funds for startup firms 

E) 

have not been a good source of funds for startup firms 

Page Ref 337 

12) 

There are two major advantages of getting a loan versus investment capital 

12) 

______ 

A) 

the money doesn't have to be paid back and no ownership in the firm is surrendered 

B) 

no ownership in the firm is surrendered and interest payments are tax deductible 

C) 

banks are reliable sources of funding for startups and interest payments are tax deductible 

D) 

banks are reliable sources of funding for startups and lenders typically take an active interest in borrowers 

E) 

the money doesn't have to be paid back and lenders typically take an active interest in their borrowers 

Page Ref 338 

13) 

________ is a financial transaction whereby a business sells its accounts receivable to a third party at a discount in exchange for cash.  

13) 

______ 

A) 

Crowdfunding 

B) 

Factoring  

C) 

Peer-to-peer lending 

D) 

Leasing  

E) 

Vendor credit 

Page Ref 338 

14) 

Andy Sanders owns a sporting goods store that appeals to hunters and fishermen. The market that Andy is trying to appeal to is called his 

14) 

______ 

A) 

critical market 

B) 

target market 

C) 

objective market 

D) 

focal market 

E) 

intention market 

Page Ref 359 

15) 

The first step in selecting a target market is to study the industry in which the firm intends to compete and determine the different potential target markets in that industry. This process is called 

15) 

______ 

A) 

market splitting 

B) 

market segmentation 

C) 

market subdividing 

D) 

market positioning 

E) 

market targeting 

Page Ref 359 

16) 

Which of the following is the correct sequence of events in regard to the process of selecting a target market and position strategy? 

16) 

______ 

A) 

creating a unique positioning strategy, segmenting the market, selecting a target market 

B) 

creating a unique positioning strategy, selecting a target market, segmenting the market 

C) 

segmenting the market, creating a unique positioning strategy, selecting a target market 

D) 

selecting a target market, creating a unique positioning strategy, segmenting the market 

E) 

segmenting the market, selecting a target market, creating a unique positioning strategy 

Page Ref 359 

17) 

A(n) ________ is the set of attributes—positive or negative—that people associate with a company. 

17) 

______ 

A) 

brand 

B) 

logo 

C) 

trade name 

D) 

emblem 

E) 

symbol 

Page Ref 360 

18) 

A ________ illustrates a firm's positioning strategy relative to its major rivals. 

18) 

______ 

A) 

positioning analysis grid 

B) 

positioning diagram  

C) 

positioning plot 

D) 

competitive analysis grid 

E) 

product attribute map 

Page Ref 361 

19) 

InstyMed's phrase "We make patients better quicker" is an example of a(n) 

19) 

______ 

A) 

grabline 

B) 

notice-line 

C) 

tagline 

D) 

attention-line 

E) 

catchline 

Page Ref 362 

20) 

A firm's ________ is the set of controllable, tactical marketing tools that it uses to produce the response it wants in the target market. 

20) 

______ 

A) 

promotional blend 

B) 

selling mix 

C) 

organizational mix 

D) 

tactical mix 

E) 

marketing mix 

Page Ref 367 

21) 

Pat Walker owns an environmental services company. The way Pat prices her services is to figure her cost and then add a 22 percent markup. The method that Pat uses to determine her prices is called 

21) 

______ 

A) 

economic-based pricing 

B) 

value-based pricing 

C) 

conformity-based pricing 

D) 

cost-based pricing 

E) 

competitive-based pricing 

Page Ref 369 

22) 

Michael Jones owns a Web design firm. The way Michael prices his products is to determine what consumers are willing to pay, and then he backs off a bit to provide a cushion. The method that Michael used to determine his prices is called 

22) 

______ 

A) 

cost-based pricing 

B) 

competitive-based pricing 

C) 

technical pricing 

D) 

value-based pricing 

E) 

predatory pricing 

Page Ref 369 

23) 

Karen Simon recently purchased a digital camera. She considered three cameras, a Kodak that was priced at $139.00, a Panasonic priced at $189.00, and a Nikon priced at $229.00. Karen couldn't tell much difference between the cameras, so she bought the Nikon, figuring that because it was the most expensive of the three, it must be the best. According to the textbook, Karen was making a 

23) 

______ 

A) 

price-worth acknowledgement 

B) 

price-merit attribution 

C) 

price-quality attribution 

D) 

cost-value acknowledgement 

E) 

cost-worth attribution 

Page Ref 369 

24) 

Efforts to establish and maintain a company's image with the public are referred to as 

24) 

______ 

A) 

public relations 

B) 

open relations 

C) 

civic relations 

D) 

advertising 

E) 

community relations 

Page Ref 372 

25) 

Which of the following is an example of intellectual property? 

25) 

______ 

A) 

Nike's swoosh logo 

B) 

Microsoft's headquarters in Redmond, Washington 

C) 

the computer that you use 

D) 

the trucks that deliver White Wave soymilk to grocery stores 

E) 

AirTran's fleet of planes 

Page Ref 394 

26) 

There are two primary rules of thumb for deciding if intellectual property protection should be pursued for a particular intellectual asset. First, a firm should determine if the intellectual property in question is directly related to its competitive advantage. Second, a firm should determine if its intellectual property 

26) 

______ 

A) 

has value in the marketplace 

B) 

is less than 20 years old 

C) 

rightfully belongs to the firm or the employees who developed it 

D) 

could be licensed to another company 

E) 

is something that was developed "in-house" 

Page Ref 396 

27) 

Which of the following are the four key forms of intellectual property protection? 

27) 

______ 

A) 

discoveries, covenants, trademarks, patents 

B) 

patents, official documents, copyrights, inventions 

C) 

convents, inventions, opportunities, and copyrights 

D) 

patents, copyrights, trademarks, and trade secrets 

E) 

discoveries, Internet domain names, innovations, trademarks 

Page Ref 399 

28) 

A grant from the federal government conferring the rights to exclude others from making, selling, or using an invention for a specific period of time is referred to as a(n) 

28) 

______ 

A) 

copyright 

B) 

idea secret 

C) 

innovation 

D) 

trademark 

E) 

patent 

Page Ref 399 

29) 

Which of the following selections correctly identifies the three types of patents? 

29) 

______ 

A) 

explicit patents, implicit patents, and plant patents 

B) 

manufacturing patents, service patents, and other patents 

C) 

utility patents, design patents, and plant patents 

D) 

usefulness patents, purpose patents, and genetic patents 

E) 

manufacturing patents, process patents, and plant patents 

Page Ref 401 

30) 

There are three basic requirements for a patent to be granted. The subject of the patent application must be 

30) 

______ 

A) 

based on cutting edge science or technology, not obvious to a person of ordinary skill in the field, and rare 

B) 

useful, novel in relation to prior arts in the field, and not obvious to a person of ordinary skill in the field 

C) 

useful, scientific, and novel in relation to prior arts in the field 

D) 

rare, difficult to copy, and not obvious to a person of ordinary skill in the field 

E) 

useful, difficult to copy, and novel in relation to prior arts in the field 

Page Ref 401 

31) 

Amazon.com's one-click ordering system, Priceline.com's "name-your-price" business model and Netflix's method for allowing customers to set up a rental list of movies they want mailed to them are examples of 

31) 

______ 

A) 

business method patents 

B) 

copyright extension patents 

C) 

business process protection patents 

D) 

trademark extension patents 

E) 

utility patents 

Page Ref 401 

32) 

________ takes place when one party engages in the unauthorized use of another party's patent. 

32) 

______ 

A) 

Patent infringement 

B) 

Patent violation 

C) 

Patent infraction 

D) 

Patent encroachment 

E) 

Patent breach 

Page Ref 407 

33) 

A form of intellectual property protection that grants to the owner of a work of authorship the legal right to determine how the work is used and to obtain the economic benefits from the work is referred to as a(n) 

33) 

______ 

A) 

assurance document 

B) 

brand 

C) 

patent 

D) 

copyright 

E) 

trade secret 

Page Ref 412 

34) 

If a local band wrote their own rendition of a Celine Dion song, the band could try to copyright their rendition of the song as a(n) 

34) 

______ 

A) 

supplemental work 

B) 

imitative work 

C) 

offshoot work 

D) 

derivative work 

E) 

subsequent work 

Page Ref 413 

35) 

Copyright law protects any work of authorship 

35) 

______ 

A) 

as soon as it is approved by the U.S. Copyright Office 

B) 

the moment it assumes a tangible form 

C) 

one year after it assumes a tangible form 

D) 

30 days after it assumes a tangible form 

E) 

90 days after it is approved by the U.S. Copyright Office 

Page Ref 413 

36) 

The main exclusion from copyright laws is that copyright laws cannot protect 

36) 

______ 

A) 

computer software 

B) 

dramatic works 

C) 

literary works 

D) 

musical compositions 

E) 

ideas 

Page Ref 413 

37) 

________ occurs when one work derives from another or is an exact copy or shows substantial similarity to the original work. 

37) 

______ 

A) 

Copyright duplication 

B) 

Copyright violation 

C) 

Copyright breach 

D) 

Copyright infringement 

E) 

Copyright intrusion 

Page Ref 414 

38) 

A company's customer list is most commonly protected under ________ regulations. 

38) 

______ 

A) 

copyright 

B) 

trade secret 

C) 

trademark 

D) 

patent 

E) 

collective mark 

Page Ref 416 

39) 

Consider the following questions Are products under development that require patent protection? Are we in compliance with the copyright license agreements into which we have entered? Is anyone infringing on our trademarks? Are company trade secrets leaking out to competitors? These are the types of questions that would be asked when conducting a(n) 

39) 

______ 

A) 

intangible material examination 

B) 

intangible material inspection 

C) 

intellectual property inventory 

D) 

intellectual property audit 

E) 

patent, trademark, copyright, and trade secret review 

Page Ref 419 

40) 

There are two primary reasons to conduct an intellectual property audit. First, it is prudent for a company to periodically determine whether its intellectual property is being properly protected. The second reason for a company to conduct an intellectual property audit is to 

40) 

______ 

A) 

make sure no intellectual property has been stolen 

B) 

remain prepared for a Security & Exchange Commission spot inspection 

C) 

remain prepared for an initial public offering 

D) 

update the value of its intellectual property on its balance sheet 

E) 

remain prepared to justify its value in the event of a merger or acquisition 

Page Ref 419 

 

1) 

D 

2) 

A 

3) 

D 

4) 

E 

5) 

E 

6) 

C 

7) 

C 

8) 

A 

9) 

A 

10) 

D 

11) 

E 

12) 

B 

13) 

B 

14) 

B 

15) 

B 

16) 

E 

17) 

A 

18) 

E 

19) 

C 

20) 

E 

21) 

D 

22) 

D 

23) 

C 

24) 

A 

25) 

A 

26) 

A 

27) 

D 

28) 

E 

29) 

C 

30) 

B 

31) 

A 

32) 

A 

33) 

D 

34) 

D 

35) 

B 

36) 

E 

37) 

D 

38) 

B 

39) 

D 

40) 

E