Final Exam Review 12-5

Drew has an idea for a new company and needs money to start his business. Drew finds an investor willing to give him money in exchange for a portion of Drew’s new company. What term describes the type of financing the investor is willing to give Drew?

• Small business loan

• Venture capitalists

• Debt financing

• Equity financing

Identify which are advantages of owning a franchise

• Ability to make business changes

• Profit sharing with franchisor

• Established product/service

• Provided training and support

Which term describes a person who takes an innovative idea and turns it into a profit?

• Entrepreneur

• Manager

• Angel investor

• Venture capitalist

Last year, Rosa spent $130,000 for merchandise she sold. She had net sales of $200,000 and expenses of $40,000. What is Rosa’s net profit?

• $70,000

• $30,000

• $130,000

• $330,000

Which term describes a person who takes an innovative idea and turns it into a profit?

• Manager

• Angel investor

• Venture capitalist

• Entrepreneur

Which term describes the value of the next best alternative?

• Current liability

• Marginal cost

• Limited warranty

• Opportunity cost

Why is Walmart considered a “click and mortar” business?

• Business model that is located in both rural and urban areas

• Offers both electronic and home repair supplies

• Employs individuals who work both full-time and part-time

• Business that includes both a website and a physical store

Which of the following is a critical factor in the success of a business, especially for brick and mortar retail?

• Warehouse

• Domain

• Ownership

• Location

Laura owns a t-shirt business with fixed costs of $50,000 a year. Her selling price per shirt is $15. Each shirt has a variable cost of $5. How many shirts does Laura need to sell to break even?

• 25,000

• 5,000

• 3,333

• 15,000

Isabella owns a business in Utah that sells candy and chocolate products made in other countries. What term describes these products that are brought into the USA to be sold in Utah?

• Exports

• Services

• Imports

• Acquisition