MANA 300 - Chapter 14 Questions and Answers

MANA 300 - Chapter 14 Questions and Answers 1. One of the four possible "outcomes" for a business identified by the text is A. sell the business to an employee B. merge with another business C. go global D. change its product line A. sell the business to an employee 2. If one tries to sell their business in a hurry A. it is likely they will regret the move B. they can usually find someone who is anxious to be an entrepreneur C. they might get much less than it is worth D. it is possible to take advantage of certain income tax breaks C. they might get much less than it is worth 0:37 / 1:27 5 Sanity-Saving Tips for Arguing on the Internet 3. Owners who intend to sell their business should ensure that A. the business is in a mature stage B. it can run without them C. they don't saturate the market D. there is lots of cash in the bank B. it can run without them 4. A big shock is usually in store for entrepreneurs when A. competitors become aggressive B. banks require monthly interest payments on their loan C. key employees ask for a raise D. they receive the first offer for their business D. they receive the first offer for their business 5. Prospective buyers are very interested in businesses that A. have a friendly work atmosphere B. have established themselves as price leaders C. have consistent revenue D. don't rely on technology instead of people C. have consistent revenue 6. In a recent survey, ______ family businesses had no formal succession plans A. 80 percent of B. very few C. second generation D. less than 25 percent of well established A. 80 percent of 7. There are many people who believe that A. children always wants to succeed their parents in the family business B. children are usually the best fit as successors in a family owned business C. parents would be better off to leave their children out of the family business D. parents may be too passive in interesting their children in taking over the family business D. parents may be too passive in interesting their children in taking over the family business 8. Some generally recognized ways to transfer a family owned business to family members are A. close the doors, walk away and let the children assume operations B. through a gifting program or joint ownership C. by selling it to a third party who will guarantee to include the children as top executives D. to hire the children as CEO's and let them assume management B. through a gifting program or joint ownership 9. Family owned business leaders often represent the greatest risk to the business when they A. get out of touch with modern business practices B. become disabled or even die C. become too comfortable in their life style D. don't share authority B. become disabled or even die 10. Two principles of success for family owned businesses are A. recognize the importance of objectivity and provide incentives for non-family employees B. remember that family comes first and roles should be clearly defined C. meet regularly to discuss financial details of the business with family members who are involved in the business and use capable managers even if they are not family D. clarify the objectives of the business and make sure that suppliers deal only with family members A. recognize the importance of objectivity and provide incentives for non-family employees 11. A common reason for selling a small business is A. to be able to spend more time on other areas of interest B. to start another small business C. to maximize the owner's return on their investment of time and capital D. to avoid having to repay some of the business's debt C. to maximize the owner's return on their investment of time and capital 12. Owners who have taken their small business public sometimes A. regret their choice of stock exchange B. end up losing their gains through poor investment decisions C. avoid paying taxes on their gains D. wish they had sold their shares privately D. wish they had sold their shares privately 13. When going public a business owners is likely to make use of A. a business broker B. their industry or trade association C. an investment dealer D. a marketing firm C. an investment dealer