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RSM 100 - EXAM
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Exam of 39 pages for the course Ch. 10 at Ch. 10 (RSM 100 - EXAM)
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RSM 100 - EXAMWhat are Professor Khans 3 P's of Success? - ANS-Planning, Preparation,
Perseverance
Study Break! Links week 1: -
ANS-https://www.youtube.com/watch?v=BHY0FxzoKZE&t=129s&ab_channel=TED
https://www.nytimes.com/guides/well/be-more-mindful-at-work
https://www.youtube.com/watch?time_continue=1&v=4WFMt14dSoQ&feature=emb_log
o
https://www.youtube.com/watch?v=PAs0gw1zIuQ
What is Wealth? - ANS-The annual produce of the land and labour of society
What is Wealth creation? - ANS-Combining materials, ideas, labour, technology so that
the output can be sold for more than costs. This profit brings wealth to the people and
society involved in production
What are the four stages of the Diamond of Sustainable Growth? - ANS-Vibrant
Entrepreneurship, Sophisticated Managerial Capabilities, Enabling Political Systems,
Effective Financial Systems
What are the resource endowments in the Diamond of Sustainable growth? -
ANS-Natural, Technological, Human
What is required to create wealth? - ANS-The interdependence of business and society
and the diamond (Vibrant Entrepreneurship, Sophisticated Managerial Capabilities,
Enabling Political Systems, Effective Financial Systems)
How is wealth created? - ANS-Develop a product or service that you can sell for more
than it cost, Trade with economies that will pay for what you have and sell you what you
want
What is a Sole proprietorship? - ANS-A business ownership in which the sole
proprietor's status as an individual is not legally separate from his or her status as a
business owner
What are the benefits and problems of Sole Proprietorships? - ANS-- Sole
proprietorships are easy to set up (and dissolve), and offer great operating flexibility, but
,the owner is personally liable for all of the firm's debts and legal responsibilities. (the
owner must handle a wide range of management and operational tasks) - The owner
also has the right to all profits after paying business-related bills and taxes.
What is a Partnership? - ANS-An association of two or more persons who operate a
business as co-owners by voluntary legal agreement
What are the benefits and problems of Partnerships? - ANS-- Partnerships are relatively
easy to set up, but they do not protect either partner from liability.
- Partnerships require shared workload and decision making, whereas sole
proprietorships are entirely the responsibility of one business owner.
- Businesses that are based on partnerships also risk having personal conflicts.
What is a Corporation? - ANS-A legal organization with assets and liabilities separate
from the assets and liabilities of its owners
What are the benefits and problems of Corporations? - ANS-- Investors receive shares
of stock in the firm, and owners have no legal and financial liability beyond their
individual investments.
- Advantages: more funding Disadvantages: double taxation - provincial and federal
What is a Not-For-Profit Corporation? - ANS-Organizations whose goals do not include
pursuing a profit
What are the benefits and problems of Not-For-Profit Corporations? - ANS--
Governments have separate legal provisions for organizational structures and
operations of not-for-profit corporations. They are also exempt from paying income
taxes.
- The legal structure of a not-for-profit corporation requires that its goals do not include
earning a profit.
What is Franchising? - ANS-A contract-based business arrangement between a
manufacturer or other supplier, and a dealer, to produce and market the supplier's good
or service. Ex: Subway, Tim Hortons
Franchising Statistics: - ANS-• Canada has 76,000 individual franchise businesses
operating under 900 different brand names
• These franchises employ more than one million Canadians
• More than $100 billion in sales each year
,What are the benefits of Franchising? - ANS-- Benefits to the franchisee include name
recognition, quick Startup, support from the franchisor, and the freedom of
small-business ownership.
- Benefits to the franchisor include opportunities for expansion and greater profits.
What are the negatives of Franchising? - ANS-- The franchisee has many cash
expenses: the initial investment, franchise fees, supplies, maintenance, leases, and so
on.
- The franchisor must trust the franchisee with the company name and image
What are shareholders? - ANS-Shareholders are people who acquire shares in
exchange for ownership. They can acquire preferred or common shares.
What are Preferred Shares? - ANS-Shares that give owners limited voting rights and the
right to receive dividends or assets before owners of common shares.
What are Common Shares? - ANS-Shares that give owners voting rights but only
residual claims to the firm's assets and income distributions.
What are the Board of Directors? - ANS-Elected by shareholders to oversee corporation
What do Corporate Officers & Managers do? - ANS-Make major corporate decisions
and handle ongoing operations
What is seed Capital? - ANS-The initial funding needed to launch a new venture.
Ex: personal savings, bank loans, loans from close acquaintances
What are some examples of Debt Financing? - ANS-Credit cards, Family and friends,
Bank loans, Finance companies
What are some examples of Equity Financing? - ANS-Venture Capitalists and Angel
Investors
What does entrepreneurship mean? - ANS-- Working for oneself, rather than for
someone else (for a salary)
- Entering a new market with new or existing products/ services; or an existing market
with new products/ services
- Operating a firm in which there is no separation between owner/ manager
- The process of discovering, evaluating & exploiting opportunities
, - Creating new organizations of any type - not-for-profits as well as businesses - "social
entrepreneurs"
What are some Characteristics of Entrepreneurs? - ANS-Vision, High Energy Level,
Need to Achieve, Self-Confidence and Optimism, Tolerance for Failure, Creativity,
Tolerance for Ambiguity and Internal Locus of Control
Why do people become entrepreneurs? - ANS-Desire to Be One's own Boss, Desire to
succeed Financially, Desire for Job Security, Desire for an improved Quality of Life
What is chapter 11 bankruptcy? - ANS-Chapter 11 is a form of bankruptcy that involves
a reorganization of a debtor's business affairs, debts, and assets, and for that reason is
known as "reorganization" bankruptcy.
What is a business plan? - ANS-Written documentation that provides orderly statement
of goals, methods, and purpose
Discusses the company's mission and vision, Analyzes unique advantage, customers,
and competition
Ø Business plans help contemporary entrepreneurs prepare enough resources and stay
focused on key objectives
What is included in a Business plan? - ANS-Executive Summary, Business Overview,
Market/Industry Analysis, Financing, Operations Plan, Team
What are the key components of a financing plan in the business overview? - ANS-The
capital requirements and how they will be financed, Alternative financing strategies, P&L
Forecasts and the key assumptions utilized, Cash Flow Forecasts and the key
assumptions utilized, Sales Forecasts, Break-even analysis and a Sensitivity analysis
What is a small business? - ANS-Industry Canada defines a small business as an
"independent business with fewer than 100 employees and revenues less than $2
million". Small businesses account for approximately two-thirds of the employment in
five Canadian industries: non-institutional health care, construction, accommodation and
food, forestry, and other services.
Name some statistics about Small Businesses in Canada: - ANS-Approximately 97% of
Canadian firms have fewer than 100 employees on staff, Canada has approximately 2.7
million self-employed individuals, Small businesses are a launching pad for
entrepreneurs
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