# Midterm

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1. The MTSU bookstore buys a book for \$18 and sells it for \$34. What is:

The % (of retail) markup?

The % (of cost) markup?
16/34 = 47.06%

16/18 = 89%
2. XYZ company estimates its variable costs of a product to be \$22.52 per unit. The company plans to make 53,000 units and desires a profit of \$75,000. Their fixed costs are \$165,540.

1.) What is the required selling price to achieve this profit?

2.) What is the desired price to break even?

3.) If they require a profit of \$105,500, what would the selling price need to be?
1.) ((22.52 x 53,000) + 165,540 + 75,000) / 53,000 = \$27.06

2.) ((22.52 x 53,000) + 165,540) / 53,000 = \$25.64

3.) ((22.52 x 53,000) + 165,540 + 105,500) / 53,000 = \$27.64
3. True or False:
Feasibility analysis is the process of determining if a business idea is viable.
True
4. True or False:
Primary research is research that is collected by the person or persons completing the analysis.
True
5. True or False:
Product / service feasibility analysis is an assessment of the overall appeal of the product or service being proposed.
True
6. True or False
A concept statement should be two-three pages long.
False
7. True or False:
A buying intentions survey is used to gauge customer interest in a product or service.
True
8. True or False:
Industry / target market feasibility is an assessment of the overall appeal of the industry and the target market for the product or service being proposed.
True
9. True or False:
The focus in organizational feasibility analysis is on financial resources.
False
10. True or False:
A new venture team is the group of founders, key employees, and advisers that either manage or help manage a new business in its start up years.
True
11. True or False:
For financial feasibility analysis, a very detailed and comprehensive financial analysis is required.
False
12. True or False:
The most important issues to consider in financial feasibility analysis are: total start up cash needed, financial performance of similar businesses, and overall financial attractiveness of the proposed venture.
True
13. True or False:
Industry analysis is business research that focuses on the potential of an industry.
True
14. True or False:
A comparison analysis is a detailed evaluation of a firm's competitors.
False
15. True or False:
The two trends that are most important to focus on in an industry analysis are business trends and environmental rends.
True
16. True or False:
Business trends include economic trends, social trends, technological advances, and political and regulatory changes.
False
17. True or False:
The 5 competitive forces model is a framework for understanding the structure of an industry.
True
18. True or False:
In most industries, the major determinant of industry profitability is the level of competition among the firms already competing in the industry.
True
19. True or False:
If the buyers are concentrated and they buy from a large number of suppliers, then the bargaining power of buyers is increased.
True
20. True or False:
A mature industry is an industry that is experiencing slow increases in demand, numerous repeat customers, and limited product innovation.
True
21. True or False:
The first step in a competitor analysis is to determine who the competition is.
True
22. True or False:
A firm's future competitors are its most important ones.
True
23. What are Porter's 5 Competitive Forces?
• -Threats of Substitutes
• -Threats of New Entrants
• -Rivalry of Existing Firms
• -Bargaining Power of Suppliers
24. Most important parts of Business Plan are...
• -Section 1: Executive Summary
• -Section 9: Management Team and Company Structure: (strength of the people starting the firm)
25. Pricing Techniques

Odd Pricing
26. Pricing Techniques

Price Lining
Price categories relating to product line items - good, better, best)
27. Pricing Techniques

• Selling items for less than costs to get people in the store and buy other things.
28. Pricing Techniques

Discounts
• (Markdowns)
• For slow moving products.
29. Pricing Techniques

Bundling
MS Office vs Word, Excel, PP, Publsiher, etc... separate.

### Card Set Information

 Author: SeanHatfield ID: 297617 Filename: Midterm Updated: 2015-03-05 06:19:27 Tags: Entreprenuership Business Management Folders: Entrepreneurship Description: Entrepreneurship midterm Show Answers:

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