Exam (elaborations)
Business Foundations O C Ferrell 12e
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Business Foundations O C Ferrell 12e
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,Business Foundations: A Changing World, 12e (Ferrell)Appendix A Guidelines for the Development of the Business Plan
1) When preparing a business plan, you are encouraged to submit your idea for approval to your
instructor as soon as possible.
Answer: TRUE
Explanation: You are encouraged to submit your idea for approval to your instructor as soon as
possible. This will eliminate wasted effort on an idea that is not feasible in the instructor's view.
Difficulty: 1 Easy
Topic: The Business Plan
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2) In a business plan, a business description identifies the target market and develops a strategy
for appealing to it.
Answer: FALSE
Explanation: A business description consists of an overview of the existing good/service or the
good/service/business you will be starting. This includes developing a mission and a rationale for
why you believe the business will be a success.
Difficulty: 1 Easy
Topic: The Business Plan
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
3) The executive summary in a business plan appears first but should be written last.
Answer: TRUE
Explanation: In a business plan, the executive summary appears first but should be written last.
Difficulty: 1 Easy
Topic: The Business Plan
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
1
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
,4) When preparing a business plan, one of the decisions you will need to make regarding the
marketing strategy is the type of product you want to offer.
Answer: TRUE
Explanation: As part of your marketing strategy, you must develop target market specifics and
decide what type of product you want to offer. You should also create a detailed rationale of the
perceived differential advantage of your product offering.
Difficulty: 1 Easy
Topic: The Business Plan
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) When preparing a business plan, one of the operational issues you need to resolve is
determining how many personnel are needed and what their required education and skills should
be.
Answer: FALSE
Explanation: Operational issues involve determining how you will make or provide your
product. The human resources requirement involves determining the number and description of
personnel needed, including realistic required education and skills.
Difficulty: 1 Easy
Topic: The Business Plan
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
6) Which of the following is the best reason that you should submit your business plan idea to
your instructor as early as possible?
A) to get feedback on ways to improve your idea
B) to pique your instructor's interest in your idea
C) to eliminate wasted effort on unfeasible ideas
D) to request your instructor's help in researching your idea
E) to make sure your idea is completely different from what other students are doing
Answer: C
Explanation: You are encouraged to submit your idea for approval to your instructor as soon as
possible. This will eliminate wasted effort an idea that is not feasible in the instructor's view.
Difficulty: 2 Medium
Topic: The Business Plan
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
2
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
, 7) Christina's instructor asked each student in her class to develop a hypothetical business plan
for a new and unique good, service, or business. Her idea is to start a new online beauty
consulting firm. What is the first thing she should do to start this project?
A) write an executive summary for her business
B) create a marketing plan for her business
C) do some online research to see if similar businesses exist
D) talk to owners of similar businesses to make sure her idea is feasible
E) submit her idea to her instructor for approval
Answer: E
Explanation: The first thing Christina should do to start this project is submit her idea to her
instructor for approval. This will allow her instructor to determine if her idea is feasible, thus
eliminating wasted effort on Christina's part.
Difficulty: 3 Hard
Topic: The Business Plan
Bloom's: Apply
AACSB: Reflective Thinking
Accessibility: Keyboard Navigation
8) Business plan proposals will be evaluated based on
A) whether your business will ultimately succeed or fail.
B) their thoroughness and your ability to provide support for the idea.
C) the originality of your idea.
D) your ability to sell your product to your peers.
E) your ability to show proven sales results.
Answer: B
Explanation: Business plan proposals will be evaluated based on their thoroughness and your
ability to provide support for the idea.
Difficulty: 1 Easy
Topic: The Business Plan
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
3
Copyright 2020 © McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior
written consent of McGraw-Hill Education.
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