1.      Return on sales is also known as:

a.      ☐Return on investment                    

b.      ☐Profit margin

c.       ☐Cost of goods sold

d.      ☐None of the above

2.      One way for a business to raise the capital it needs to grow it finance with:

a.      ☐Earnings

b.      ☐Debt

c.       ☐Equity

d.      ☐All of the above

3.      An example of a company where revenue is primarily from the production of a tangible product is:

a.      ☐Ford Motor Company

b.      ☐Ernst & Young

c.       ☐Massage Envy

d.      ☐Netflix

4.      One disadvantage of corporations is that their profits are subject to double-taxation, taxed once on the corporate level and again when investors receive their share of profits.

a.      ☐True

b.      ☐False

5.      Examples of variable costs include:

a.      ☐Commissions

b.      ☐Shipping

c.       ☐Cost for materials

d.      ☐All of the above

6.      Payment of a percentage of the revenue generated by the sale of each unit is known as:

a.      ☐Royalty

b.      ☐Franchise

c.       ☐Diversification

d.      ☐Line extension

7.      Which kind of company acts as a middleman, buying goods from a manufacturer and selling them on to a retailer?

a.      ☐Retail

b.      ☐Wholesale

c.       ☐Manufacturing

d.      ☐Service

8.      A cash flow statement provides the same information as an income statement.

a.      ☐True

b.      ☐False

9.      A company codifies its reason for existence in the form of a:

a.      ☐Performance objective

b.      ☐Mission statement

c.       ☐Profit statement

d.      ☐None of the above

10.  What is the final step in the employee recruitment process?

a.      ☐Salary negotiation

b.      ☐Hiring

c.       ☐Orientation

d.      ☐None of the above

11.  In 2013, Ken invested $20,000 in his company.  In the same year, his net profits were $3,500.  What was his annual ROI in 2013?

a.      ☐17.5%

b.      ☐5.7%

c.       ☐1.75%

d.      ☐57.1%

12.  A free enterprise system  is also known as:

a.      ☐Economics

b.      ☐Market system

c.       ☐Production economy

d.      ☐Free-trade system

13.  The opposite of the skimming strategy of pricing is the:

a.      ☐Penetration strategy

b.      ☐Skimming strategy

c.       ☐Meet-or-beat the competition

d.      ☐Cost-plus

14.  A reward for becoming an entrepreneur is:

a.      ☐Control over time

b.      ☐Control over compensation

c.       ☐Control over  working conditions

d.      ☐All of the above

15.  Lee has $255,000 in current assets and $175,000 in current liabilities.  How much working capital does she have?

a.      ☐$85,000

b.      ☐$430,000

c.       ☐$80,000

d.      ☐None of the above

16.  How often should you rebalance your investment portfolio?

a.      ☐Monthly

b.      ☐Bi-annually

c.       ☐Annually

d.      ☐Every three years

17.  Net worth is also known as owner’s equity.

a.      ☐True

b.      ☐False

18.  Franchising and licensing are examples of what kind of strategies?

a.      ☐Harvest

b.      ☐Diversification

c.       ☐Replication

d.      ☐None of the above

19.  Which of the following telephone behaviors is NOT a hallmark of a successful salesperson?

a.      ☐Waiting to offer solution or products until later in the call.

b.      ☐Letting the customer talk less than you do.

c.       ☐Asking the right questions.

d.      ☐None of the above.

20.  Using orders as a unit of sale is most commonly associated with which kind of business?

a.      ☐Retail

b.      ☐Wholesale

c.       ☐Manufacturing

d.      ☐Service

21.  The giving of resources to charities in an effort to help solve a social or environmental problem is known as:

a.      ☐Philosophy

b.      ☐Mission

c.       ☐Philanthropy

d.      ☐Vision Statement

22.  If furniture store buys a sofa from the wholesaler for $600 and sells it for $2,500, what is the retailer’s gross profit per unit?

a.      ☐$3,100

b.      ☐25%

c.       ☐$1,900

d.      ☐4.16

23.  Four out of five small firms fail in the first five years of operation.

a.      ☐True

b.      ☐False

24.  According to the principle of compounding interest, if you invest $1.00 at 10 percent over five years, how much will you have at the end of those five years? 

a.      ☐$1.50

b.      ☐$1.61

c.       ☐$1.51

d.      ☐$1.10

25.  Which one of the following is NOT one of the five roots of opportunity?

a.      ☐Problems

b.      ☐Inventions

c.       ☐Competition

d.      ☐None of the above