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WorksheetsCH16: Financing and Leading the Enterprise
Total questions: 25
Worksheet time: 13mins
Q1) Revenue is sales minus returns, rebates, and discounts.
True
False
Q2) Which of the following is not a revenue model?
Transaction fee revenue
Advertising revenue
Product sales
Freemium revenue
Q3) Etsy and many other ecommerce sites take advantage of this revenue model:
Subscription fee
Affiliate revenue model
Member fee
Product sales
Q4) Open source companies like JBoss often make use of the product sales revenue model.
True
False
Q5) What is a cost driver?
Factor that affects total firm costs
Fixed costs varying over time
Volume of output
Impact on profit
Q6) Management salaries are an example of:
Variable costs
Semi-variable costs
Multi-variable costs
Fixed costs
Q7) How does Google make most of its money?
Text based ads on search results
Leasing out servers
Premium search capabilities
Android OS
Q8) The best conditions for profit occur when product cost is low, and is high.
Price
Perceived value
Hockey stick growth
Market ownership
Q9) Which of the following is a high margin, low volume company?
BMW
Amazon
Walmart
Toyota
Q10) What is a blockbuster profit model?
Build a system that reuses a product in many forms
Create a low-cost product to offer low price per unit of value
Focus on creating a series of big winners
Find unmet customer needs and build a new business model
Q11) Dropbox is this type of profit model:
New business model
Protected innovation
Installed base
Low cost
Q12) Cash flow is the sum of retained earnings minus:
Depreciation provision made by the firm
Fixed costs
Profitability
Crunch capital
Q13) Entrepreneurial intensity is the drive and committed nature of any good entrepreneur.
True
False
Q14) What happened to Patagonia when it grew too quickly?
Toxic work environment
Cash used to meet demand-outpaced sales
Company fractured into two divisions
Lost advantages in regional economies
Q15) Organic growth is growth enabled by internally generated funds.
True
False
Q16) Which of the following is not a source of revenue growth?
Increased market capitalization
New product offerings
Acquisitions
Increased brand recognition
Q17) Facebook's acquisition of Instagram was risky because it cost the company a quarter of the cash they had on hand.
True
False
Q18) Venture capital firms typically do not realize the gains of their investment immediately because harvest plans typically have a horizon of five to ten years.
True
False
Q19) Why did the VR startup Vrideo fail?
Major corporations entered the VR scene soon after their founding
VR headset makers refused to support their software
The hype around VR died and investors no longer saw the vertical as promising
Internal power struggles within the company caused mismanagement of funds
Q20) What strategy does Tencent employ that is not as common among major western tech companies?
Software as a service
Refusal to cooperate with Chinese government
In-app purchases
Refusal to bundle software
Q1) Define ‘revenue model’.
Describes how the firm will generate income
Describes the factors that affect total firm expenses
Defines how and when the owners and investors will realize or attain an actual cash return on their investment
The mechanism a firm uses to attain financial gains from its revenues
Q2) What is a sunk cost?
A cost that has already been incurred and cannot be affected by any present or future decisions
Defines how and when the owners and investors will realize or attain an actual cash return on their investment
The mechanism a firm uses to attain financial gains from its revenues
Describes how the firm will generate income
Q3) Define ‘cost model’.
Describes how the firm will generate income
Describes the factors that affect total firm expenses
Defines how and when the owners and investors will realize or attain an actual cash return on their investment
The mechanism a firm uses to attain financial gains from its revenues
Q4) Define ‘profit model’.
Describes how the firm will generate income
The mechanism a firm uses to attain financial gains from its revenues
Describes the factors that affect total firm expenses
Defines how and when the owners and investors will realize or attain an actual cash return on their investment
Q5) Which of the following is not one of the nine profit models?
Niche
Brand
Low cost
Blockbuster
