Question 1

The higher a small business scores on the 5 C's of credit,the greater its chances will be of receiving a loan.

Accepted Answer

A) True 
 B)False

Question 2

Because gathering information on competitors' products or services,strategies,and market share is so difficult,most lenders and investors see the competitor analysis section of the business plan as optional.

Accepted Answer

A) True 
 B)False

Question 3

The ideal business plan should be at least 100 pages long to prove to potential lenders and investors that the entrepreneur has studied the business and the market opportunity sufficiently.

Accepted Answer

A) True 
 B)False

Question 4

A business plan should contain certain basic elements,but it should also be tailored to the individual company by emphasizing its particular personality and reflecting the entrepreneur's excitement for the business opportunity.

Accepted Answer

A) True 
 B)False

Question 5

Generally,an industry is more attractive when quality substitute products are not readily available,the prices of substitute products are higher,and buyers' costs of switching products is high.

Accepted Answer

A) True 
 B)False

Question 6

Proving that a profitable market exists involves:

Accepted Answer

A)  proving that customers in the marketplace need or want the good or service and are willing to pay for it.
B)  documenting claims about market size and growth rates with as much factual information as possible.
C)  making claims such as "This market is so big that if we get just 1 percent of it,we'll be profitable within 6 months."
D)  A and B onlyE) A) and B)
F) A) and C)

Question 7

A lender's primary concern in granting a loan is reassurance that the applicant will repay it,whereas an investor's primary concern is earning a satisfactory rate of return.

Accepted Answer

A) True 
 B)False

Question 8

The process of determining whether an entrepreneur's idea is a viable foundation for creating a successful business is known as a:

Accepted Answer

A)  business plan.
B)  strategic analysis.
C)  industry analysis.
D)  feasibility analysis.E) B) and D)
F) B) and C)

Question 9

The criteria lenders and investors use to evaluate the credit worthiness of entrepreneurs that are seeking financing including capital,capacity,collateral,character,and conditions are referred to as:

Accepted Answer

A)  components of the business plans.
B)  aspects of financial strategy.
C)  the five C's of credit.
D)  interesting considerations.E) None of the above
F) A) and B)

Question 10

A product or service feasibility analysis determines the degree to which a product or service idea appeals to potential customers and identifies the necessary resources.

Accepted Answer

A) True 
 B)False

Question 11

Cash flow projections are not an essential part of a business plan as long as the entrepreneur provides accurate forecasts of the venture's profits.

Accepted Answer

A) True 
 B)False

Question 12

An entrepreneur may find that the business plan indicated that the business is not viable.This is another potential benefit of writing a business plan; this revelation occurred before the owner committed significant resources to the venture.

Accepted Answer

A) True 
 B)False

Question 13

Products or services that may be sought as alternative solutions such as purchasing tax planning software rather than paying a CPA to assist with preparing your taxes are referred to as:

Accepted Answer

A)  buyers products.
B)  rivalry products.
C)  substitute products.
D)  competitive alternatives.E) B) and C)
F) None of the above

Question 14

The executive summary section of the business plan:

Accepted Answer

A)  should be a concise summary of the business venture.
B)  should be no more than two pages long.
C)  must capture the reader's attention and entice her to read the rest of the plan.
D)  All of the aboveE) A) and B)
F) A) and C)

Question 15

Porter's five forces model only considers direct competitors within a single industry.

Accepted Answer

A) True 
 B)False

Question 16

The plan of operation section of the business plan should address how the business plans to retain key managers and employees.

Accepted Answer

A) True 
 B)False

Question 17

Conducting ________ research involves collecting data firsthand and analyzing it while ________ research involves gathering data that has already been complied and is available.

Accepted Answer

A)  primary; secondary
B)  secondary; primary
C)  primary; industry
D)  product; secondaryE) A) and D)
F) All of the above

Question 18

Primary research is information that has already been complied and is available for use,often at very reasonable costs or sometimes at no cost to the entrepreneur.

Accepted Answer

A) True 
 B)False

Question 19

The ________ serves as the "thesis statement" for the entire business plan and is the broadest expression of a company's purpose and defines the direction in which it will move.

Accepted Answer

A)  executive summary
B)  mission statement
C)  company history
D)  marketing strategyE) None of the above
F) A) and B)

Question 20

One form of primary research is:

Accepted Answer

A)  to review published articles.
B)  Internet research.
C)  library research.
D)  a focus group.E) A) and C)
F) None of the above

Exam 4: Conducting a Feasibility Analysis and Crafting a Winning Business Plan

The higher a small business scores on the 5 C's of credit,the greater its chances will be of receiving a loan.

Correct AnswerverifiedShow Answer

The ________ serves as the "thesis statement" for the entire business plan and is the broadest expression of a company's purpose and defines the direction in which it will move.

Correct AnswerverifiedShow Answer

Primary research is information that has already been complied and is available for use,often at very reasonable costs or sometimes at no cost to the entrepreneur.

Correct AnswerverifiedShow Answer

The ideal business plan should be at least 100 pages long to prove to potential lenders and investors that the entrepreneur has studied the business and the market opportunity sufficiently.

Correct AnswerverifiedShow Answer

The criteria lenders and investors use to evaluate the credit worthiness of entrepreneurs that are seeking financing including capital,capacity,collateral,character,and conditions are referred to as:

Correct AnswerverifiedShow Answer

A product or service feasibility analysis determines the degree to which a product or service idea appeals to potential customers and identifies the necessary resources.

Correct AnswerverifiedShow Answer

Proving that a profitable market exists involves:

Correct AnswerverifiedShow Answer

An entrepreneur may find that the business plan indicated that the business is not viable.This is another potential benefit of writing a business plan; this revelation occurred before the owner committed significant resources to the venture.

Correct AnswerverifiedShow Answer

Porter's five forces model only considers direct competitors within a single industry.

Correct AnswerverifiedShow Answer

Generally,an industry is more attractive when quality substitute products are not readily available,the prices of substitute products are higher,and buyers' costs of switching products is high.

Correct AnswerverifiedShow Answer

The executive summary section of the business plan:

Correct AnswerverifiedShow Answer

The plan of operation section of the business plan should address how the business plans to retain key managers and employees.

Correct AnswerverifiedShow Answer

Conducting ________ research involves collecting data firsthand and analyzing it while ________ research involves gathering data that has already been complied and is available.

Correct AnswerverifiedShow Answer

Because gathering information on competitors' products or services,strategies,and market share is so difficult,most lenders and investors see the competitor analysis section of the business plan as optional.

Correct AnswerverifiedShow Answer

Cash flow projections are not an essential part of a business plan as long as the entrepreneur provides accurate forecasts of the venture's profits.

Correct AnswerverifiedShow Answer

The process of determining whether an entrepreneur's idea is a viable foundation for creating a successful business is known as a:

Correct AnswerverifiedShow Answer

A lender's primary concern in granting a loan is reassurance that the applicant will repay it,whereas an investor's primary concern is earning a satisfactory rate of return.

Correct AnswerverifiedShow Answer

Products or services that may be sought as alternative solutions such as purchasing tax planning software rather than paying a CPA to assist with preparing your taxes are referred to as:

Correct AnswerverifiedShow Answer

A business plan should contain certain basic elements,but it should also be tailored to the individual company by emphasizing its particular personality and reflecting the entrepreneur's excitement for the business opportunity.

Correct AnswerverifiedShow Answer

One form of primary research is:

Correct AnswerverifiedShow Answer

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Conducting research involves collecting data firsthand and analyzing it while research involves gathering data that has already been complied and is available.

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