20 mcq | Business & Finance homework help


1.Which statement BEST describes why a successful entrepreneur needs to be flexible? 
a. Starting a new business often leads to envy in the wider business community.
b. People with whom entrepreneurs work are often opinionated and rigid.
c. Entrepreneurial ventures involve risky situations and unexpected events.
d. Initial business revenues tend to be low and may remain low for several years.

2. If you are planning to start a new business, how long should you realistically expect it to take for your business to earn a profit? 
a. six to twelve months 
b. one to two years 
c. three to five years 
d. more than five years 

3. Globalization is recognized by all as a force for good in the U.S. economy. 
a. false 
b. true 

4. Almost all businesses are organized the same way, in a vertical, hierarchical structure.
a. false 
b. true 

5. Mary Beth is opening her own day care center. She plans to offer her employees flexible schedules, free child care, and free memberships to the local fitness center in hopes of keeping them motivated and relaxed. Mary Beth is offering work/life benefits to her employees.
 a. false 
b. true 

6.Once long-term goals and objectives have been determined, middle management generates ________. a. strategic plans 
b. short-term targets 
c. tactical plans 
d. resource evaluations 

7. Corporate social responsibility is mainly concerned with how a company affects the ________. 
a. family 
b. investor 
c. community 
d. vendors 

8. According to the Hawthorne effect, ________.Answer 
a. workers will be more productive when the physical influences on the workplace suit them 
b. workers will be more productive when the psychological influences on the workplace suit them 
c. workers will be more productive when they know they are being studied 
d. workers will be less productive when they know they are being studied 

9. Limited liability companies are unable to offer stock options or stock bonus incentives to their employees because ________. 
a. benefits such as these are too costly for these types of startup companies 
b. extra profits are reinvested into the company, not into company stocks 
c. limited liability companies do not have shareholders or stock 
d. approval of stock benefits is difficult due to the number of members 

10. A(n) ________ occurs when there are many buyers and sellers and little differentiation between products, but perceived differences between products among consumers. 
a. monopolistic competition 
b. monopoly 
c. oligopoly 
d. perfect competition 

11.An American businessperson who demonstrates sensitivity to and appreciation for Chilean culture possesses ________.
a. cross-cultural detachment 
b. cross-cultural awareness 
c. ethnocentrism 
d. cultural intervention 

12. Kyle has just accepted a job as an accountant for a large firm. He is deaf, so his employer is expected to accommodate Kyle’s needs with some modified telephone equipment. These reasonable accommodations are legislated under the ________.
a. Civil Rights Act of 1964 
b. Americans with Disabilities Act 
c. Age Discrimination in Employment Act 
d. Discrimination Act of 1999 

13. A free trade area is a compact abolishing trade barriers among member countries. 
a. false 
b. true 

14. Isabella has been assigned a job in a completely new division and is unsure of what the future holds for her and her career. Isabella was surprised that the company’s newest hire was named division head. She feels this promotion was unfair and that others deserved it more. Isabella is beginning to feel so dissatisfied with the new situation that she completes less and less work each day. The motivational theory that attempts to understand Isabella’s situation is ________. 
a. sociocracy management theory 
b. Theory X management theory 
c. Theory Z management theory 
d. uncertainty management theory 

15. Of the following four reasons why new small businesses may fail, which is the MOST common? 
a. not enough revenue 
b. too much debt 
c. poor planning 
d. inexperienced management 

16. According to Mass low, which need are people striving to satisfy when they seek to maximize their own potential? 
a. esteem 
b. physiological 
c. self-actualization 
d. safety

17. Old Town Industries has three divisions. Division X has been in existence the longest and has the most stable sales. Division Y has been in existence for five years and is slightly less risky than the overall firm. Division Z is the research and development side of the business. When allocating funds, the firm should probably: 
require the highest rate of return from division X since it has been in existence the longest.
assign the highest cost of capital to division Z because it is most likely the riskiest of the three divisions.
use the firm’s WACC as the cost of capital for division Z as it provides analysis for the entire firm.
use the firm’s WACC as the cost of capital for divisions A and B because they are part of the revenue-producing operations of the firm.
allocate capital funds evenly amongst the divisions to maintain the current capital structure of the firm.

18. Ted is trying to decide what cost of capital he should assign to a project. Which one of the following should be his primary consideration in this decision? 
Amount of debt used to finance the project
Use, or lack thereof, of preferred stock to finance the project
Mix of funds used to finance the project
Risk level of the project
Length of the project’s life

19. Lester lent money to The Corner Store by purchasing bonds issued by the store. The rate of return that he and the other lenders require is referred to as the: 
pure play cost.
cost of debt.
weighted average cost of capital.
subjective cost.
cost of equity.


20. Systematic risk is: 
totally eliminated when a portfolio is fully diversified.
defined as the total risk associated with surprise events.
risk that affects a limited number of securities.
measured by beta.
measured by standard deviation

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