MGT602 Final Term Past Papers 6

FINALTERM EXAMINATION · Spring 2009 · MGT602- Entrepreneurship (Session - 3) · Marks: 8

Q1. An ice cream producing company merges with a cotton spinning company this merger is an example of: (1 marks)

1. Diversified activity merger
2. Product extension merger
3. Market extension merger
4. Vertical merger

Correct answer: Diversified activity merger

Ref: Diversified activity merger

Combination of at least two totally unrelated firms (Handouts Page No. 32)

Q2. A company dealing in beer has a merger with cigarettes manufacturing firm. This merger is called: (1 marks)

1. Horizontal merger
2. Product extension merger
3. Market extension merger
4. Vertical merger

Correct answer: Product extension merger

Ref: A product extension merger occurs when acquiring and acquired companies have related production but do not have directly competing products. (Handouts Page No. 35)

Q3. Combination of at least two firms at different market levels is called: (1 marks)

1. Joint venture
2. Synergy
3. Horizontal merger
4. Vertical merger

Correct answer: Vertical merger

Ref: Vertical merger

Combination of at least two firms at different market levels (Handouts page no. 36)

Q4. A patent is granted for a specified amount of time because of the assumption: (1 marks)

1. That during this time firm will cover its development costs
2. That firm will earn a sufficient profit during this period
3. To limit the monopoly of the firm
4. That it will stimulate idea and development of a better product

Correct answer: To limit the monopoly of the firm

Ref: Since a patent grants the right to exclude others from practicing the invention, it would seem to give the owner a monopoly in the economic sense

Q5. Which of the following is TRUE for Disclosure Document? (1 marks)

1. It gives recognition that he was the inventor of the idea in past
2. It gives recognition that he is the first the inventor of the idea
3. It gives recognition that he will be the invent an idea in future
4. It gives recognition that he wants to copy the idea

Correct answer: It gives recognition that he is the first the inventor of the idea

Ref: This office also administers the Disclosure Document Program, in which the inventor files disclosure of the invention, giving recognition that he or she was the first to develop the idea. (Handouts Page No.47)

Q6. Which of the following is the most important factor for the entrepreneur, while starting a new venture, to make an assessment of business? (1 marks)

1. Profit
2. Risk
3. Market
4. Competitors

Correct answer: Risk

Assessment of Risk (page 58)

It is important that the entrepreneur make an assessment of risk in the following manner: The entrepreneur should indicate the potential risks to the new venture. Next should be a discussion of what might happen if these risks become reality. Finally the entrepreneur should discuss the strategy to prevent, minimize, or respond to these risks. The entrepreneur should also provide alternative strategies should these risk factors occur.

Q7. Which of the following plan helps an organization to provide the lines of authority? (1 marks)

1. Financial
2. Business
3. Organizational
4. Marketing

Correct answer: Organizational

Ref. Page No.58 : It is helpful to provide an organization chart indicating the line of authority. This chart shows the investor who controls the organization and how members interact

Q8. The business plan is an integration of functional plans such as: (1 marks)

1. Marketing, finance, manufacturing, and human resources
2. Marketing, Management, human resources, and operations management
3. Advertisement, Management, Marketing, and Finance
4. Manufacturing, Human resources, Management, and Human Resource

Correct answer: Marketing, finance, manufacturing, and human resources

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Q9. Which of the following type of commitment is necessary from the for the satisfaction of Investors? (1 marks)

1. Seasonal
2. Full time
3. Conditional
4. Satisfactory

Correct answer: Full time

Rationale: Investors will not be positive about a venture that does not have fulltime commitment (page 60)

Q10. On the part of entrepreneur which of the following has/ have a great concern to the Investors? (1 marks)

1. Commitment
2. Experience
3. Knowledge
4. All of the given options

Correct answer: All of the given options

Q11. Which of the following is NOT a characteristic of marketing plan? (1 marks)

1. It should provide a strategy to accomplish the company’s mission
2. It should provide for the use of existing resources
3. It should be simple and short
4. It should be rigid

Correct answer: It should be rigid

CHARACT E RIST ICS OF A MARK ETING PLA N (page 64)

An effective marketing plan should:

1. Provide a strategy to accomplish the company mission.
2. Be based on facts and valid assumptions.
3. Provide for the use of existing resources.
4. Describe an organization to implement the plan.
5. Provide for continuity.
6. Be simple and short.
7. Be flexible.