EEE 2023 FINAL EXAM QUESTIONS
WITH 100% COMPLETE
SOLUTIONS
A ____ agreement is an arrangement whereby a firm with the proprietary rights to a
product grants permission to another firm to manufacture that product for specified
royalties or other payments. - Answer-Licensing
Which foreign market entry strategy gives a firm total control over its foreign operations?
- Answer-Wholly-owned subsidiary
_____, acquisitions, strategic alliances, joint ventures, licensing, and franchising are
examples of external growth strategies. - Answer-Mergers
Anton's Bakery made an outright purchase of Meg's Cakes. Anton's Bakery was
involved in a(n) __________. - Answer-Acquisition
Which of the following is NOT an advantage of emphasizing external growth strategies?
A. Economies of scale
B. Increased business complexity
C. Diversification of business risk
D. Reducing competition
E. Obtaining access to technical expertise - Answer-Increased business complexity
Pete Marsella entered into a franchising agreement where he was to pay an ongoing
royalty. Pete Marsella is the ___________. - Answer-Franchisee
The owners of Flip It Burgers, a potential franchisor, realized that in fast food, it is
important for the franchisor to provide a formula for doing business to the franchisee
along with training, advertising and other forms of assistance. The right type of franchise
system for Flip It Burger is a ________________. - Answer-Business Format
When Angie Carmicheal, a former middle school math teacher, buys the rights to open
five Kumon franchises within the city limits of Jacksonville, Florida, this is an example of
a(n) ____________ franchise agreement - Answer-area
A franchisee buys the rights to open five Jiffy Lube franchises in Grand Rapids,
Michigan, and also the rights to open 15 additional Jiffy Lube locations in the same area
to other individuals. This is an example of a(n) ___________ franchise agreement. -
Answer-master
, Which is NOT a way franchisors can develop the potential of their franchisees? -
Answer-reduce the royalty rate
Managers, because they are usually paid a salary, may not be as committed to the
success of their individual units as franchisees, who are in effect the owners of the units
they manage. This concept gave birth to ___________ theory. - Answer-Agency
Franchisors are required by law to disclose all their costs in a document called the: -
Answer-franchise disclosure document
Which is NOT a question to ask a franchisor before buying a franchise? - Answer-How
often will I be able to take a vacation?
The offer and sale of a franchise is regulated by the ___________. - Answer-Federal
Trade Commission (FTC)
Which is NOT an industry where business format franchising predominates? - Answer-
computer software
Why Most New Ventures Need Financing or Funding - Answer-Cash flow challenges
Capital investments
Lenghty product development cycles
Cash flow challenges - Answer-inventory must be purchased, employees must be
trained and paid, and advertising must be paid for before cash is generated from sales
Capital Investments - Answer-the cost of buying real estate, building facilities, and
purchasing equipment typically exceeds a firm's ability to provide funds for these needs
on its own
Lenghty product development cycles - Answer-some products are under development
for years before they generate earnings. the up-front costs often exceed a firm's ability
to fund these activities on its own
Alternatives for raising money for a new venture - Answer-Personal funds
Equity capital
Debt financing
Creative sources
Bootstrapping - Answer-finding ways to avoid the need for external financing or funding
through creativity, ingenuity, thriftiness, cost-cutting, or any means necessary
Preparing to raise debt or equity financing - Answer-Step 1: Determine precisely how
much money is needed
Step 2: Determine the type of financing or funding that is the most appropriate
Step 3: Develop a strategy for engaging potential investors or bankers
WITH 100% COMPLETE
SOLUTIONS
A ____ agreement is an arrangement whereby a firm with the proprietary rights to a
product grants permission to another firm to manufacture that product for specified
royalties or other payments. - Answer-Licensing
Which foreign market entry strategy gives a firm total control over its foreign operations?
- Answer-Wholly-owned subsidiary
_____, acquisitions, strategic alliances, joint ventures, licensing, and franchising are
examples of external growth strategies. - Answer-Mergers
Anton's Bakery made an outright purchase of Meg's Cakes. Anton's Bakery was
involved in a(n) __________. - Answer-Acquisition
Which of the following is NOT an advantage of emphasizing external growth strategies?
A. Economies of scale
B. Increased business complexity
C. Diversification of business risk
D. Reducing competition
E. Obtaining access to technical expertise - Answer-Increased business complexity
Pete Marsella entered into a franchising agreement where he was to pay an ongoing
royalty. Pete Marsella is the ___________. - Answer-Franchisee
The owners of Flip It Burgers, a potential franchisor, realized that in fast food, it is
important for the franchisor to provide a formula for doing business to the franchisee
along with training, advertising and other forms of assistance. The right type of franchise
system for Flip It Burger is a ________________. - Answer-Business Format
When Angie Carmicheal, a former middle school math teacher, buys the rights to open
five Kumon franchises within the city limits of Jacksonville, Florida, this is an example of
a(n) ____________ franchise agreement - Answer-area
A franchisee buys the rights to open five Jiffy Lube franchises in Grand Rapids,
Michigan, and also the rights to open 15 additional Jiffy Lube locations in the same area
to other individuals. This is an example of a(n) ___________ franchise agreement. -
Answer-master
, Which is NOT a way franchisors can develop the potential of their franchisees? -
Answer-reduce the royalty rate
Managers, because they are usually paid a salary, may not be as committed to the
success of their individual units as franchisees, who are in effect the owners of the units
they manage. This concept gave birth to ___________ theory. - Answer-Agency
Franchisors are required by law to disclose all their costs in a document called the: -
Answer-franchise disclosure document
Which is NOT a question to ask a franchisor before buying a franchise? - Answer-How
often will I be able to take a vacation?
The offer and sale of a franchise is regulated by the ___________. - Answer-Federal
Trade Commission (FTC)
Which is NOT an industry where business format franchising predominates? - Answer-
computer software
Why Most New Ventures Need Financing or Funding - Answer-Cash flow challenges
Capital investments
Lenghty product development cycles
Cash flow challenges - Answer-inventory must be purchased, employees must be
trained and paid, and advertising must be paid for before cash is generated from sales
Capital Investments - Answer-the cost of buying real estate, building facilities, and
purchasing equipment typically exceeds a firm's ability to provide funds for these needs
on its own
Lenghty product development cycles - Answer-some products are under development
for years before they generate earnings. the up-front costs often exceed a firm's ability
to fund these activities on its own
Alternatives for raising money for a new venture - Answer-Personal funds
Equity capital
Debt financing
Creative sources
Bootstrapping - Answer-finding ways to avoid the need for external financing or funding
through creativity, ingenuity, thriftiness, cost-cutting, or any means necessary
Preparing to raise debt or equity financing - Answer-Step 1: Determine precisely how
much money is needed
Step 2: Determine the type of financing or funding that is the most appropriate
Step 3: Develop a strategy for engaging potential investors or bankers
