Entrepreneurship Theory, Process, Practice 12th Edition By Donald Kuratko (Test Bank)

Test Bank for
Entrepreneurship
Theory, Process,
Practice 12 Edition by
th

Donald Kuratko (All
Chapters 1-15, 100%
Original Verified, A+
Grade)
All Chapters Arranged
Reverse: 15-1

,Chapter 15: Harvesting the Entrepreneurial Venture

1. A harvest plan defines how and when owners and investors will realize an actual cash return on their
investment.
a. True
b. False
ANSWER: True
RATIONALE: A harvest plan defines how and when owners and investors will realize an actual cash return
on their investment.
POINTS: 1
REFERENCES: 15.1 Harvesting the Venture: A Focus on the Future
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ENTR.KURA.24.15.1 - Discuss the concept of “harvest” as a plan for the future
DATE CREATED: 5/8/2023 3:03 AM
DATE MODIFIED: 5/12/2023 11:29 AM

2. Once an entrepreneur decides to "harvest" the business, their challenges and responsibilities are over.
a. True
b. False
ANSWER: False
RATIONALE: “Harvest” does not mean that the challenges and responsibility of the entrepreneur are over.
There are challenging decisions to be made.
POINTS: 1
REFERENCES: 15.1 Harvesting the Venture: A Focus on the Future
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ENTR.KURA.24.15.1 - Discuss the concept of “harvest” as a plan for the future
DATE CREATED: 5/8/2023 3:07 AM
DATE MODIFIED: 5/12/2023 11:29 AM

3. Only 3 out of 10 privately held firms survive into a second generation.
a. True
b. False
ANSWER: True
RATIONALE: Research shows that many privately held firms go out of existence after 10 years; only 3 of
10 survive into a second generation.
POINTS: 1
REFERENCES: 15.2 The Management Succession Strategy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ENTR.KURA.24.15.2 - Examine the key factors in the management succession of a venture
DATE CREATED: 5/8/2023 3:08 AM
DATE MODIFIED: 5/12/2023 11:29 AM

4. Only 10 percent of all privately held enterprises make it to a third generation.
a. True
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, b. False
ANSWER: False
RATIONALE: Only 16 percent of all privately held enterprises make it to a third generation.
POINTS: 1
REFERENCES: 15.2 The Management Succession Strategy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ENTR.KURA.24.15.2 - Examine the key factors in the management succession of a venture
DATE CREATED: 5/8/2023 3:10 AM
DATE MODIFIED: 5/12/2023 11:29 AM

5. A managerial successor provides the critical ideas for new-product development and future ventures.
a. True
b. False
ANSWER: False
RATIONALE: The managerial successor is someone who is interested in efficiency, internal control, and the
effective use of resources.
POINTS: 1
REFERENCES: 15.3 Key Factors in Succession
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ENTR.KURA.24.15.3 - Identify some of the most important sources of succession
DATE CREATED: 5/8/2023 3:11 AM
DATE MODIFIED: 5/12/2023 11:29 AM

6. An important issue in the Oakland Scavenger Company case was that of whether nonfamily members should
be allowed to be successors in family businesses.
a. True
b. False
ANSWER: False
RATIONALE: This case focused on the Fifth Amendment versus Title VII of the 1964 Civil Right Act: if
discrimination overrides the protection of life, liberty, and property from unreasonable
interference from the state, then the rights of parents to leave their property and business to
anyone can be abolished.
POINTS: 1
REFERENCES: 15.3 Key Factors in Succession
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ENTR.KURA.24.15.4 - Discuss the potential impact of regulations on family business
succession
DATE CREATED: 5/8/2023 3:13 AM
DATE MODIFIED: 5/12/2023 11:29 AM

7. The steps in developing a succession strategy are understanding the contextual aspects, identifying successor qualities,
and developing a written succession plan.
a. True
b. False
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, ANSWER: True
RATIONALE: Developing a succession strategy involves several steps including understanding the
contextual aspect, identifying successor qualities, and developing a written succession plan.
POINTS: 1
REFERENCES: 15.4 Developing a Succession Strategy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ENTR.KURA.24.15.5 - Outline the ways to develop a succession strategy
DATE CREATED: 5/8/2023 3:14 AM
DATE MODIFIED: 5/12/2023 11:29 AM

8. Some entrepreneurs are easy to replace, and some cannot be replaced.
a. True
b. False
ANSWER: True
RATIONALE: Some entrepreneurs are easy to replace; some cannot be replaced. To a large degree, this is
determined by the type of venture.
POINTS: 1
REFERENCES: 15.4 Developing a Succession Strategy
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ENTR.KURA.24.15.5 - Outline the ways to develop a succession strategy
DATE CREATED: 5/8/2023 3:16 AM
DATE MODIFIED: 5/12/2023 11:29 AM

9. The prospectus for an initial public offering (IPO) must disclose fully all pertinent information about a company and
must present a fair representation of the firm's true prospects.
a. True
b. False
ANSWER: True
RATIONALE: The prospectus for an initial public offering (IPO) must disclose fully all pertinent
information about a company and must present a fair representation of the firm’s true
prospects.
POINTS: 1
REFERENCES: 15.5 The Exit Strategy: Liquidity Events
QUESTION TYPE: True / False
HAS VARIABLES: False
LEARNING OBJECTIVES: ENTR.KURA.24.15.6 - Describe the specifics of an initial public offering (IPO) as a
potential harvest strategy
DATE CREATED: 5/8/2023 3:17 AM
DATE MODIFIED: 5/12/2023 11:29 AM

10. Harvest strategies rarely involve the complete sale of a business.
a. True
b. False
ANSWER: False
RATIONALE: Many privately held business entrepreneurs choose a harvest strategy that involves complete
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