Question: Flexibility

Answer: Ability to adapt, willingness to change

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Question: Courage

Answer: Takes risks in spite of possible losses

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Question: Empathy

Answer: Sensitive to thoughts and feelings of others

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Question: What are three characteristics of entrepreneurs?

Answer: Creativity, Determination, Enthusiasm

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Question: After a self-assessment, a potential entrepreneur has learned that she has a very low risk tolerance. Based upon this finding, which approach might be less stressful for the entrepreneur to have her own business?

Answer: Buy an existing business that is already successful.

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Question: An entrepreneur moves into a small town and notices several stores selling guns and ammunition. The entrepreneur loves to compete in competitive shooting events. Based on the scenario provided, what should be emphasized in marketing to attract customers?

Answer: Location

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Question: An entrepreneur has been working for a flooring business in a neighboring town. He feels he is ready to open his own flooring business in his local community. Which should be emphasized in marketing to attract customers to his new business?

Answer: Lower Prices

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Question: Which is one of the greatest benefits of entrepreneurship?

Answer: Being your own boss

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Question: Which are three risks of entrepreneurship?

Answer: Long hours, potential business failure, financial insecurity

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Question: Gabe has worked as a journeyman electrician for an employer for the past 16 years. He is paid a good salary. His only dissatisfaction is the hours are long and often when he requests time off he is denied because of customer workload.
Which benefit of entrepreneurship will Gabe most enjoy?

Answer: Autonomy

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Question: What is a primary benefit of starting a new business without purchasing a franchise or buying an existing business?

Answer: Developing your own rules

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Question: A mechanic just graduated from motorcycle repair school and wants to start a business because there is a lack of motorcycle repair shops in the local town. Given the facts provided, which opportunity would be the best choice for the motorcycle mechanic to open a business?

Answer: Start a new business and invest $50,000 in modern diagnostic tools.

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Question: An entrepreneur who has a hobby in leathercraft wants to turn it into a business. She wants to sell purses, belts, and other leathercrafts from her home. Which opportunity for starting a leathercraft business would have the highest probability of success?

Answer: Build an online storefront

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Question: Based upon the education and skills gained from the years of vocational training as an auto mechanic, as well as having grown up in a family of entrepreneurs, a young adult decides to open an auto mechanic shop. Which customer group will this new auto mechanic business support?

Answer: Businesses

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Question: The owner of a pizza delivery business is seeking new customers. The owner has identified a group of potential customers that have moved into some new housing within reaches of his drivers. Which method of segmentation is the owner using?

Answer: Geographic

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Question: A child daycare center needs to identify a value of proposition that will help parents feel secure about using their services. Which two initiatives meets this objective?

Answer: Providing live web cams parents can access from the Internet by using a secure logon. Offering a list of references from other parents

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Question: The owner of a pet daycare is presenting a plan to investors to expand the facility and promises the center will meet the needs of customers with a variety of schedules. What is a legitimate value proposition for potential customers?

Answer: Providing extended hours to pickup and drop off pets before and after work

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Question: Which two groups benefit most from a well-written business plan?

Answer: Business owner
Investors

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Question: Which of the following should be addressed in the description section of a business plan?

Answer: Target Markets

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Question: Easy to setup, but has unlimited liability.

Answer: Sole Proprietorship

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Question: Terminates upon death of a partner

Answer: General or Limited Partnership

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Question: Double-taxed, but best for international businesses

Answer: C Corporation

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Question: Similar to a C Corporation, but taxed at a lower rate

Answer: S Corporation

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Question: Owned by no one; pays no U.S federal tax

Answer: Nonprofit Corporation

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Question: Best for a single member seeking low risk

Answer: Limited Liability Company

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Question: The partners of an awning repair shop are assessing the amount of money needed to start a business at a new location. The partners have calculating that the business will generate more than enough revenue to cover monthly expenses after its second month in operation. What is the amount of start-up capital the partners will need to open the new awning repair business?

Answer: $84,920

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Question: The owner of a mobile food truck plans to sell tacos, hamburgers, and other foods to employees in a large office complex. Before opening his business, the owner will most likely need to obtain which of the following documents from each employee to verify they have completed a course in food handling safety?

Answer: Certificate

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Question: An individual starts a babysitting business with a loan of $1000. The loan is for 2 years at a 5% COMPOUND interest rate. How much will the individual owe by the end of the loan assuming nothing is paid until the end of the 2 years term.

Answer: $1,102.50

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Question: A carpenter wants to start his own business building custom cabinets. Unfortunately, he has no business training and needs assistance writing a business plan, finding funding, and obtaining general advice. Which agency should the carpenter utilize?

Answer: SBA

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Question: A software development consultant works with several clients. Some of the clients are competitors. What is a consequence if the consultant violates confidentiality by discussing a client's project with another client?

Answer: Loss of clients and possible lawsuit

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Question: Exchanging ownership for cash, either by acquisition or merger

Answer: Harvesting

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Question: Transferring ownership to people who already operate the business

Answer: Management Buyout

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Question: A business owner sells ownership to a retirement fund for the employees

Answer: Employee Stock Ownership Plan (ESOP)

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Question: Dividing ownership of a privately held company into shares sold to the public

Answer: Initial Public Offering (IPO)

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Question: The owner of a popular seafood restaurant needs to hire a new chef

Answer: 1. Identify the skills required of the new chef
2. Write the job description, including minimum and desired requirements
3. Post an ad in places most likely to be viewed by qualified candidates
4. Accept and review applications to assess the most qualified candidate

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Question: A successful software trainer has decided to open a corporate training business. The software trainer is putting together an organizational chair and assessing what job roles will be needed. What are some of the expected roles of those employees on the highest level of the organizational chart?

Answer: Developing succession plans and building a board of advisors

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Question: An interior designer has learned the she must pay-self employment tax on her individual earnings. Which type of legal structure must pay self-employment tax?

Answer: Sole proprietorship

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Question: An entrepreneur was building a website for a new dog grooming business. Through internet searches, the entrepreneur found many pictures to use on the new business's website. Which type of intellectual property protection is at issue in this example?

Answer: Copyright

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Question: An entrepreneur notices new demand for products featuring characters from a recent movie. The entrepreneur finds a manufacturer of kitchen products featuring these character. Based on the scenario provided, what should be a primary concern of this entrepreneur?

Answer: Reliability of supply

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Question: A family owns a tractor sales and supply store. Over the past decade sales of large tractors and implements have decreased as many of the old farms in the community have sold and been subdivided into smaller residential hobby farms. Given the facts provided, which action would be most likely to increase the sustainability of the business?

Answer: Add a line of small lawn and garden tractors

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Question: The owner of a new landscaping company has set a number of milestones for the first year of his business. Achieving which of the following goals will show that the business has broken even or better?

Answer: Profitable operations

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Question: A property care business provides landscaping maintenance, debris cleanup, and snow removal. The owner is reviewing several requests for its services. Which potential new customer will generate the highest gross revenue over the next year?

Answer: Apartment complex paying $175 weekly

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Question: A local bakery wants to develop close relationships with its customers to encourage return business. What is the best option for the bakery to accomplish this goal?

Answer: Provide a free baked good each quarter to customers who signup to receive a monthly newsletter

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Question: The owner of a tire shop in a large city wants to reach the largest number of people with promotional efforts. Which method should be used?

Answer: TV advertising

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Question: The owner of a computer training center wants to know the book value of all the equipment in the center at the end of the year. Which financial statement provides this information?

Answer: Balance sheet

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Question: The owner of Reliable Appliance Repairs is analyzing financial parts of the income statement including Net Sales, Total Cost of Goods Sold, Gross Profit, Total Expenses, Pre-Tax Profit and Net Profit. Match each figure to correct location in the Income Statement worksheet.

Answer: A.$45,144
B.$18,500
C.$26,644
D.$9,325

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Question: A business owner is applying for a loan with a bank. The bank uses a standard credit application form that asks the business owner about her personal income, bank accounts, credit cards, current balances outstanding, whether she rents or owns her house and other personal information. Which three are factors that affect credit scores?

Answer: Payment history on existing loans
Amounts owed on existing loans
Types of credit already in use by the applicant

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Question: The owner of an online retail business dropships merchandise from her wholesale suppliers directly to her retail customers. Which expense of her business is variable?

Answer: Cost of Shipping

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Question: A law is passed increasing the minimum wage from $10 to $15 per hour. A gourmet pizza restaurant is popular for obtaining its ingredients locally. Which two factors are most responsible for the price increase?

Answer: Increased raw material costs
Increased labor costs

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Question: A welder has arranged for a loan from a family member in the amount of $10,000 with an annual simple interest rate of 6%. The loan is due in 12 months. What is the amount of simple interest due at the end of the 12 month loan period?

Answer: $600

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Question: The owner of a used car sales business is analyzing the cash flow for his business for the prior year. In January, the opening inventory balance of automobiles was $208,000. What is the ending inventory value?

Answer: $100,000

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Question: The owner of a real estate office prepared a cash flow budget for the coming month. The beginning cash balance was $1,500
Match the dollar amount to the correct line item on a cash flow budget:

Answer: Available cash: $6,500
Cash outflow:$4,600
Cash inflow:$5,000
Ending cash balance:$1,900

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Question: A massage therapist wants to open her own spa. She researches the prices charged at the three local competitor spas and estimates she can average $80 per customer visit. Match the correct figure to the appropriate location in the break-even formula.

Answer: A. Fixed Costs = $245,400
B. Average Price = $80
C. Variable Cost = $3.00
D. Break Even Point in units = 3,187

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Question: A farmer providing custom farming and tractor services averages averages $1,000 per day in revenue with a gross profit margin of $40. How many prospects should the farmer have in their active clients listing at all times at a minimum?

Answer: 20

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Question: The owner of a car detailing business wants to develop a reputation for customer service. The owner is developing policies and procedures to guide the staff in this effort. Which documented procedure covers the area of customer service?

Answer: Customer Complaints

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Question: Successful entrepreneurs typically posses which three characteristics?

Answer: Tenacious, Adaptable, Responsible

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Question: Kim went to school and studied to be a chef, he loves cooking and worked hard to master his craft so he could open his own restaurant after graduation, but Kim's family pressured him to take over the family horticulture business instead. Which characteristic might cause Kim's business to fail?

Answer: Kim lacks enthusiasm for the business

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Question: After a self-assessment, potential entrepreneur has learned that he knows nothing about accounting and keeping records for a business. Based upon his finding, what should this entrepreneur do?

Answer: Enroll in a beginning level business accounting course at a local community college

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Question: Match each type of networking with its opportunity for information sharing.

Answer: Local community- attendance at a Chamber of Commerce event
Your industry- participation in a specialized trade show
Online communities- posting on twitter or Linkedin
Face to Face acquaintances- having conversations including one- sentence elevator speech

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Question: An entrepreneur would like to open a pizza restaurant. A survey of customers in the area reveals several complaints about existing pizza restaurants. The entrepreneur notices that most complaints are about deliver orders being delayed and pizza arriving cold. Which two competitive factors are being addressed by this business opportunity?

Answer: Quality
Service

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Question: Which is one of the greatest risks of entrepreneurship?

Answer: Loss of money

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Question: A photographer enjoys traveling and having freedom over her own schedule. She would like to turn her photography hobby into a business. Which are the two greatest benefits she might experience by turning her hobby into a successful business?

Answer: Making her own rules
Satisfaction

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Question: What is a primary drawback of starting a new business without purchasing a franchise or buying an existing business?

Answer: Greater chance the business will fail

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Question: Which two are advantages of buying a franchise?

Answer: Branding
Marketing assistance

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Question: An entrepreneur wants to own a flower shop and researching the business options available.
When 100 potential customers were surveyed, they provided the following responses:
Which opportunity for starting a florist business would have the highest probability of success?

Answer: Buy an existing florist business and enhance it so customers have the option to also place orders online

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Question: A photographer wants to turn her hobby into a business. She is researching the business options available. When 100 potential customers were surveyed, they provided the following responses:
Which opportunity for starting a photography business would have the highest probability?

Answer: Setup a studio with a gallery of sample photography

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Question: A home remodeling business wants to identify customer segments to target its services. Match each method of segmentation to its potential customers.

Answer: Geographic- Setup a studio with a gallery of sample photography

Behavioral- Homeowners who respond to promotional discounts

Demographic- Homeowners with higher incomes

Psychographic- Homeowners who like modern decor and conveniences

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Question: A SCUBA instructor is interested in opening a dive tour business. She is preparing a presentation to a group of potential investors that will include a value proposition. Of the options below, which three should be included in the value proposition?

Answer: Overview of the business
what services will be offered
how the business differs from the competitors

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Question: Which three C's must be addressed in all types of business plans?

Answer: Concept
Customers
Capital

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Question: What is the primary advantage of the General Partnership versus a Sole Proprietorship?

Answer: More than one person is responsible for financial backing

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Question: A fitness trainer wants to create a legal structure that will help protect her from lawsuits. She will have no partners or employees.

Answer: Limited Liability Company

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Question: A beekeeper wants to start a seasonal business renting hives to farmers to pollinate their orchards and crops. The beekeeper believes the business will cover its own costs after three months, and that start-up expenses for hives, trucking, and other costs through that same time will be $18,000. What is Total Financing Required by the beekeeper?

Answer: $29,700

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Question: An entrepreneur discovers that residents in a small rural area travel an average of 10 miles to shop at the nearest grocery store. The entrepreneur finds an old two story ranch house for sale located on a busy road in the center of the rural area. What will the entrepreneur need to obtain before proceeding?

Answer: Zoning variance

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Question: Businesses accept many forms of payment in exchange for goods and services.

Answer: Cash- government back currency

Check- payable note used by account owner to pay debt

Debit card- electronic deduction from existing account

Line of Credit- a loan to purchase now and pay later

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Question: A chef is interested in opening a restaurant in a nearby town. He wants to learn more about possible competitors. Where should the chef go to obtain a list of restaurants in the nearby town?

Answer: Local Chamber of Commerce

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Question: An auto mechanic opens a business in a community that has a history of auto repair shops delivering poor quality workmanship. How can the new auto mechanic regain the trust of local customers?

Answer: Advertise a free 90-day warranty on all repairs

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Question: The owner of a small successful hardware store has died and left the business to his children. None of his children want to operate the business. They decide to sell. The business has a book value of $876,400 and annual earnings of $1,050,600. Four companies have made offers to buy the hardware store. Which is the better offer?

Answer: Company C has offered to pay three times the book value

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Question: A non-profit organization wants to hire a Director. The organization has been operating for only a year and is growing fast. The newly created Director position will responsible for all aspects of operating the entire organization, so the founders want to hire a candidate with at least 10 years experience. Which factor could prevent the hire?

Answer: Whether the non-profit organization can afford the salary to attract a qualified candidate

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Question: A real estate broker employs 10 real estate agents. The broker provides offices, administrative support, and marketing for her agents. Which of the following should outsourced?

Answer: Internet services

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Question: A fitness trainer provides her services to clients as a sole proprietorship. What are the tax implications for this structure?

Answer: Income earned by a sole proprietorship passes to one owner to be taxed

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Question: An entrepreneur invents a new kind of ice cream scoop that is heated in a microwave oven to make scooping ice cream easier. What should the entrepreneur do to protect the invention?

Answer: Apply for a patent on the ice cream scoop

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Question: The owner of a rapidly growing landscaping business is finding the workload increasingly difficult to manage projects, acquire clients, supervise employees, keep records and pay bills. What business is being implemented in this example?

Answer: Separation of Duties

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Question: The owner of a gourmet chocolate shop creates treats that have unique flavors derived from cocoa grown only in specific regions of the world. On which segment of the supply chain should the owner focus?

Answer: Between the gourmet chocolate shop and the base chocolate suppliers

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Question: A new dog grooming business is setting milestones that will determine if it is successful or not. The owner has decided the business will be considered successful when it starts to make a profit. Which milestone will measure profitability?

Answer: When revenue exceeds the break-even point

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Question: A mobile lunch truck is introducing a new seasonal salad. Which group of people would be the most likely to purchase this new salad?

Answer: Employees who work at nearby businesses

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Question: A consultant wants to use a form of personal communication to market his services to businesses during a conference. Which form of communication should be used?

Answer: Networking

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Question: A fitness trainer in a neighborhood is trying to add new consumers who have recently moved into the neighborhood. What is effective for attracting new customers?

Answer: Promotional Discount

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Question: Match each cost or expense with the proper category of an income statement.

Answer: Operating expense- advertising
Operating expense- insurance
cost of goods sold- labor
cost of goods sold-materials
operating expense- rent
revenue- sales

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Question: The owner of Quality Electrical is analyzing financial parts of the Income statement including Net Sales, Total Cost of Goods Sold, Gross Profit, Total expenses, Pre-Tax Profit and Net Profit. Match each figure to the correct calculation in the income statement worksheet

Answer: A. -$85,030
B. -$18,545
C. -$42,485
D. - $27,615

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Question: The owner of a new automobile sales lot is applying for two loans at the bank. Why would the bank be more inclined to approve the first loan but not the second?

Answer: The inventory loan would have the automobiles as collateral, but the operating loan has no collateral

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Question: A carpenter builds and remodels residential decks. Classify the carpenter's cost according to how each cost acts in connection with the number of decks built and remodeled.

Answer: Variable cost- Building permits paid by the carpenter for new and remodeled decks

Fixed cost- Professional license fee to sit for the state builders' exam

Variable Cost- Travel to the residences of customers to build and remodel decks

Variable Cost- Woods for building and remodeling decks

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Question: An independent gas station sits besides a busy highway. Half of its customers are travelers passing through the area. Why would the gas station charge more for purchases made with a credit card?

Answer: To offset processing fees charged by the credit card companies

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Question: A beekeeper is analyzing the cash flow for his business for the prior year. What was the ending inventory value?

Answer: $6,500

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Question: The owner of a landscaping business is developing a cash flow budget for the coming month. If the beginning cash balance is $1,500, what will be the ending cash balance?

Answer: $3,350

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Question: An electrician has fixed costs of $1,500 per month. The only variable costs are needed for labor and supplies. How many repairs are needed to break-even for the year?

Answer: 450 repairs

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Question: A pizza maker has come up with a new takeout restaurant concept that sells only large gourmet pizzas. Match the correct figure to the appropriate location in the break-even formula.

Answer: A. Fixed Costs = $380,000
B. Average Price = $20
C. Variable Cost = $7
D. Break Even Point in units = 29,231

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Question: A DJ notices the number of customers attending her Saturday night dances is decreasing. What should the DJ do to create more loyal repeat customers?

Answer: Create a Facebook page about the dances and make changes based on customer comments/ suggestions

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Question: Which characteristic would be beneficial to an entrepreneur?

Answer: Doesn't give up easily

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Question: What are three characteristics of entrepreneurs?

Answer: Responsible
Disciplined
Honest

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Question: How would a perspective entrepreneur benefit from a personality self- assessment?

Answer: It can identify strengths and weaknesses in the entrepreneur's leadership style

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