Question 1

Harvesting options include ________.

Accepted Answer

A)  An IPO
B)  Increasing cash flows and a management buyout
C)  Merging
D)  Being acquired
E)  All of the aboveF) B) and C)
G) All of the above

Question 2

Book value is one of the most common methods for computing a company's valuation.

Accepted Answer

A) True 
 B)False

Question 3

Describe three simple methods that can be used to estimate a selling price for a business:

Accepted Answer

1)Compare it to other businesses.If you ...

Question 4

When an entrepreneur sells his or her company to its managers,this exit strategy is called ________.

Accepted Answer

A)  A management buyout
B)  A management takeover
C)  An acquisition
D)  A merger
E)  A hostile takeoverF) A) and B)
G) C) and E)

Question 5

The multigenerational family-owned-and-operated business best exemplifies the company that provides an opportunity to "grow and go."

Accepted Answer

A) True 
 B)False

Question 6

Ways to value a business include comparison to other firms,benchmarking,or looking at a multiple of net earnings.Any of the methods is an attempt to arrive at a ________.

Accepted Answer

A)  Fair market value
B)  Future value
C)  Most profitable price
D)  Net present value
E)  Gross profitF) A) and B)
G) A) and C)

Question 7

A disadvantage of harvesting cash over time as an exit strategy is ________.

Accepted Answer

A)  It can take a long time to complete
B)  The owner doesn't have to look for a buyer
C)  The managers find out what the company is really worth
D)  You might get less money
E)  All of the aboveF) D) and E)
G) A) and D)

Question 8

If you buy a McDonalds franchise and agree to pay a royalty fee of 12.5% annually,how much money will you owe McDonalds at the end of a year in which you sell $98,000 of product?

Accepted Answer

A)  $12,250
B)  $13,250
C)  $11,250
D)  $10,250
E)  $14,250F) C) and D)
G) A) and B)

Question 9

What are the drawbacks of a franchising agreement to the franchisor?

Accepted Answer

The drawbacks include: the potential for...

Question 10

Why is it not a good idea to tell investors in your business plan that your exit strategy is simply "to take the business public"?

Accepted Answer

Simply claiming that your business will ...

Exam 21: Franchising, licensing, and Harvesting: Cashing in Your Brand

When an entrepreneur sells his or her company to its managers,this exit strategy is called ________.

Correct Answer
verified

The multigenerational family-owned-and-operated business best exemplifies the company that provides an opportunity to "grow and go."

Correct Answer
verified

Describe three simple methods that can be used to estimate a selling price for a business:

Correct Answer
verified
1)Compare it to other businesses.If you ...
View Answer

A disadvantage of harvesting cash over time as an exit strategy is ________.

Correct Answer
verified

What are the drawbacks of a franchising agreement to the franchisor?

Correct Answer
verified
The drawbacks include: the potential for...
View Answer

Harvesting options include ________.

Correct Answer
verified

Book value is one of the most common methods for computing a company's valuation.

Correct Answer
verified

Why is it not a good idea to tell investors in your business plan that your exit strategy is simply "to take the business public"?

Correct Answer
verified
Simply claiming that your business will ...
View Answer

If you buy a McDonalds franchise and agree to pay a royalty fee of 12.5% annually,how much money will you owe McDonalds at the end of a year in which you sell $98,000 of product?

Correct Answer
verified

Ways to value a business include comparison to other firms,benchmarking,or looking at a multiple of net earnings.Any of the methods is an attempt to arrive at a ________.

Correct Answer
verified

Exam 21: Franchising, licensing, and Harvesting: Cashing in Your Brand

When an entrepreneur sells his or her company to its managers,this exit strategy is called ________.

Correct AnswerverifiedShow Answer

The multigenerational family-owned-and-operated business best exemplifies the company that provides an opportunity to "grow and go."

Correct AnswerverifiedShow Answer

Describe three simple methods that can be used to estimate a selling price for a business:

Correct Answerverified1)Compare it to other businesses.If you ...View AnswerShow Answer

A disadvantage of harvesting cash over time as an exit strategy is ________.

Correct AnswerverifiedShow Answer

What are the drawbacks of a franchising agreement to the franchisor?

Correct AnswerverifiedThe drawbacks include: the potential for...View AnswerShow Answer

Harvesting options include ________.

Correct AnswerverifiedShow Answer

Book value is one of the most common methods for computing a company's valuation.

Correct AnswerverifiedShow Answer

Why is it not a good idea to tell investors in your business plan that your exit strategy is simply "to take the business public"?

Correct AnswerverifiedSimply claiming that your business will ...View AnswerShow Answer

If you buy a McDonalds franchise and agree to pay a royalty fee of 12.5% annually,how much money will you owe McDonalds at the end of a year in which you sell $98,000 of product?

Correct AnswerverifiedShow Answer

Ways to value a business include comparison to other firms,benchmarking,or looking at a multiple of net earnings.Any of the methods is an attempt to arrive at a ________.

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
1)Compare it to other businesses.If you ...
View Answer

Correct Answer
verified

Correct Answer
verified
The drawbacks include: the potential for...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
Simply claiming that your business will ...
View Answer

Correct Answer
verified

Correct Answer
verified