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6. When researching your prospective business, you must know your product and your
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A. skills.
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B. customer.
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C. interests.
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D. sales pitch.
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7. An entrepreneur estimating costs for a new business tends to avoid looking at the
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A. cost of capital equipment.
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B. escalating costs of raw materials.
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C. inevitability of things going wrong.
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D. costs associated with hiring personnel.
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8. You're in the process of setting up a business plan. In particular, you're thinking about how to work your plan. You need to focus on two process considerations. The first concerns organization of the business; the second concerns the operations of the business, such as
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A. deciding who will do what and when.
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B. thinking out your mission statement.
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C. contacting potential investors.
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D. working out a pricing scheme.
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9. Assuming you own a home, where would the amount for the mortgage owed to the bank go in a personal balance sheet?
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A. Under both the equity and the assets sections
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B. Under liabilities
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C. Under assets
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D. Within the equity total
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10. In thinking about the "color of money," which color would correspond to a DVD player charged on a department store credit card?
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A. Green
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B. Red
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C. Gray
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D. Blue
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11. As you do your _______ when considering a business venture, you should consider factors such as your financial resources, your special skills, where you live, and what you like to do with your time.
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A. evaluating
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B. creative thinking
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C. planning
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D. marketing and production
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12. The art of getting the greatest benefit from limited financial resources is called
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A. marketing.
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B. profit.
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C. inflation.
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D. financial management
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13. You've decided that you want to get your household budget under control so you can increase the proportion of money you devote to savings. Your first step will be to
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A. check out wise investments.
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B. think about how you most enjoy spending your time.
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C. keep track of your expenses for a period of time.
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D. open a savings account.
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14. Outlays of monies for items such as life insurance, car insurance, and medical insurance are considered
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A. mandatory spending.
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B. excessive spending.
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C. security spending.
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D. wasteful spending
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15. When budgeting for your immediate needs, you should divide them into
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A. fixed and immediate expenses.
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B. discretionary and fixed expenses.
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C. immediate and discretionary expenses.
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D. fixed and intermittent expenses.
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16. Which of the nine "P" questions related to planning deal with rating how well your business is doing?
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A. Place
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B. Purpose
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C. Performance
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D. Personnel
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17. According to the discussion of the "color of money," blue money is
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A. money set aside for emergencies and unexpected expenses.
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B. money spent wisely.
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C. currently expended green money.
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D. invested for the long term.
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18. As you manage your personal finances, you'll probably want to pay attention to general conditions in the economy. One general concern for most people managing their day-to-day finances would be
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A. the international labor market.
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B. good deals in major real estate ventures.
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C. current interest rates.
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D. the likelihood of a major depression
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19. In ancient Greece, a group of people living together with the common purpose of taking care of each other through economic activity was called a
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A. household.
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B. tribe.
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C. commune.
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D. city.
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20. The correct equation for the Balance Sheet is:
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A. Expenses – Net Income = Owner's Equity
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B. Assets – Liabilities = Owner's Equity
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C. Net Income + Expenses = Owner's Equity
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D. Liabilities + Assets = Owner's Equity
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exam_number_060042rr.docx
