Leach TB Chap01 Ed3


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CHAPTER 1 INTRODUCTION AND OVERVIEW True-False Questions F. 1. Entrepreneurs provide the financing to individuals who think, reason, and act to convert ideas into commercial opportunities and create opportunities. T. 2. Entrepreneurship is the process of changing ideas into commercial opportunities and creating value. T. 3. An entrepreneur is an individual who thinks, reasons, and acts to convert ideas into commercial opportunities and to create value. F. 4. Mark Twain once said, “I was always able to see an opportunity before it became one.” T. 5. Small businesses, those with less than 500 employees, represent over 99 percent of all employers, and account for about one-half of the gross domestic product in the United States. F. 6. Small and growing enterprises are critical to the U.S. economy; small firms provide 20 to 30 percent of net new jobs. T. 7. Small high-technology firms are responsible for twice as many product innovations per employee and obtain more patents per sales dollar than large high-technology firms. F. 8. Phillips and Kirchhoff, using Dun & Bradstreet data, found that 24 percent of new firms were still in existence after two years of operation. T. 9. Nearly half of business failures are due to economic factors such as inadequate sales, insufficient profits, and industry weakness. T. 10. Although the risks associated with starting a new entrepreneurial venture are large, there is always room for one more success. T. 11. Recent studies by Phillips and Kirchhoff, and by Headd, found that about 38%-40% of new firms survived six years of operation. F. 12. One study of Inc. magazine’s 500 high-growth firms suggests that about 88 percent of founders feel their firms’ successes are due to 1
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Chapter 1: Introduction and Overview extraordinary ideas, while the remaining 12 percent feel their firms’ successes are due to exceptional execution of ordinary ideas. F. 13. “Fads” are large societal, demographic, or technological trends or changes that are slow in forming but once in place continue for many years. T. 14. “Fads” are not predictable, have short lives, and do not involve macro changes. T. 15. Three major megatrends discussed in Chapter 1 include: societal trends or changes, demographic trends or changes, and technological trends or changes. F. 16. In 1982, Harry Dent identified several major or megatrends shaping U.S. society and the world. T. 17. The so-called “baby boom” generation applies to people born in the United States during the 1946-1964 time period. T. 18. Perhaps the most important invention shuttling us from an industrial society to an information society is the computer chip. F. 19. Environmental commerce, or e-commerce, involves the use of electronic means to conduct business online. T.
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This note was uploaded on 12/05/2009 for the course FIN Fin 595 taught by Professor Shabbir during the Spring '09 term at CSU Dominguez Hills.

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