ACDS: Entrepreneurship Examination 1 November 2020 College of Distance Studies Alpha University College Degree Programme

Entrepreneurship Examination (Course No MGMT 313) Time allowed 1:30 hrs. November 2020

Directions: Write your Name, Registration No., Department, Exam Center, and put "" mark for the program (Degree) you are attending in the space provided on the answer sheet.

Part I. True or False Questions: (Write “True” if the statement is true or write “False” if the statement is false and write your answer in the space provided on the answer sheet. (2 point(s) each))

1. Entrepreneurial urge is not related to the level of development. (False)

2. Contemporary business is considered a social and economic institution and is affected by political, social, and economic forces. (True)

3. Financial analysis primarily deals with the interpretation of the data incorporated in the proforma financial statements of a project. (True)

4. Market Rate of Return is the rate of return that a project will earn if there are no distortions. (True)

5. One advantage of a sole proprietorship is it has limited liability which aids in minimizing risk. (False)

6. Costing is not merely a tool of control but also a device of management planning, organization, and direction. (True)

7. The nature of social benefits and costs indicates that there is a standard method and technique applicable to all types of investment projects. (False)

8. Social cost refers to all those harmful consequences and damages which the community as a whole sustains as a result of the productive process, and for which private entrepreneurs are not held responsible. (True)

9. For an economist, “an entrepreneur is one who brings resources, labor, materials, and other assets into combination that makes their value greater than before.” (True)

10. Among the factors that do NOT influence profit variation is a change in variable costs and selling price. (False)

Part II. Multiple Choices Questions: (Choose the best answer for the questions from the alternatives given and write the letter of your choice in the space provided on the answer sheet. (2 point(s) each))

1. Which one of the following characteristics best fits a super salesperson entrepreneur? A. Capacity to understand and feel with another B. Desire to help others C. Strong personal initiative D. A and B E. All of the above (Correct Answer: C)

2. The operational objectives of a firm could be one of the following except: A. Productivity improvement B. Cost increasing (Correct Answer: B) C. Improvement in contribution margin D. Increase in capacity utilization E. None of the above

3. What is the first step in a sample survey of entrepreneurship market? A. Developing the questionnaires B. Selecting the sampling scheme and sample size C. Defining the target population (Correct Answer: C) D. Recruiting and training the field investigators

ACDS: Entrepreneurship Examination 2 November 2020 College of Distance Studies Alpha University College

1. Which one of the following is NOT an advantage of ratio analysis? A. The data are highly accurate B. It enables the management to analyze the business situation C. It enables the company’s management to monitor the business situation D. It helps to check out future plans of the business. Answer: A. The data are highly accurate

2. All of the following are demographic market segmentation except: A. Ethnicity B. Income C. Personality D. Race Answer: C. Personality

3. In which form of business ownership organization is the business entity considered to be a “person” in the eyes of the law? A. Joint-Stock company B. Partnership C. Cooperative society D. Sole proprietorship Answer: A. Joint-Stock company

4. One of the most potentially profitable areas of human resources development for small and medium-sized enterprises is: A. Getting a large amount of loan B. Training of entrepreneurs and managers C. Establishing associations D. None of the above Answer: B. Training of entrepreneurs and managers

5. Global economic factors are more influenced by: A. Customer B. Entrepreneur type C. Cooperation D. Change Answer: D. Change

6. Which one of the following is the main characterization of marketing? A. The behavior of consumers B. Breakdown of demand C. The price charged for the product D. All of the above E. None of the above Answer: D. All of the above

7. One of the following is NOT the principal element of cost? A. Material B. Labor C. Income D. Expenses Answer: C. Income

8. Prime cost is a combination of _________and __________. A. Factory cost and administrative expenses B. Direct material and factory expenses C. Direct material and direct labor D. Factor cost and selling cost Answer: C. Direct material and direct labor

9. One of the given sources is NOT part of secondary information sources when organizing project analysis documents. A. Personal observations B. Population statistics C. Household size and composition D. Bank statements Answer: A. Personal observations

ACDS: Entrepreneurship Examination 3 November 2020 College of Distance Studies Alpha University College

1. Desire to plan and set goals, need to achieve, Desire for feedback, and belief that one person can make a difference is best expressed by the characteristics of: A. Real manager B. Super salesperson C. Expert idea generator D. Personal achievers Answer: D. Personal achievers

2. What kind of financial analysis should an entrepreneur execute to study cost-output-profit relationship at varying levels of output? A. Break-even analysis B. Performance analysis C. Profitability analysis D. Sensitivity analysis Answer: A. Break-even analysis

3. What is the main problem of a small business in a developing country? A. Lack of vision B. Poor management C. Lack of strategy D. All of the above Answer: D. All of the above

Part III. Matching Questions Match the items listed under column "A" with the appropriate answer listed under column "B" and write the letter of your choice in the space provided on the answer sheet. (1 point(s) each)

Column “A” Column “B”

1. Conversion costs - D. Direct labor costs plus factory overhead costs.

2. Line organization - E. The backbone of organization hierarchy.

3. Prime costs - C. Change in direct proportion to changes in output.

4. Leverage ratios - F. The use of debt finance, which is cheaper but riskier source.

5. Partnership - G. A business entity containing more than one company

6. Variable costs - B. Cost that change in total in proportion to change in the related level of total activity.

7. Activity ratios - H. Measure how efficiently the assets are employed by the firm.

8. Entrepreneurial cycle - A. Stimulate, support, and sustain

9. Sole proprietorship - I. Individual investments

10. Liquidity ratios - J. The ability of the firm to meet its obligations in the short time

Part IV. Short Answer Questions

1. Entrepreneurial environment categorized into six vital segments, list at least four. (4 points) A) Economic environment B) Technological environment C) Political environment D) Social environment

2. Write down the Four economic indicators (4 points) A) Gross Domestic Product (GDP) B) Unemployment rate C) Inflation rate D) Interest rates

3. What are the two classes of commerce? A) Wholesale trade B) Retail trade