Chapter Quiz

Entrepreneurship, 2012, Barringer & Ireland 4th ed.

Chapter 03 Feasibility Analysis
1. The most effective businesses emerge from a process that includes each of the following
EXCEPT:
a. recognizing a business idea.
b. testing the feasibility of the idea.
c. writing a business plan.
d. securing angel investment.
2. Which of the following is an example of primary research?
a. census data
b. industry studies
c. administering surveys
d. analyst forecasts
3. _____ is an assessment of the overall appeal of the product or service being proposed.
a. Concept testing
b. Product/service feasibility analysis
c. Test marketing
d. Usability testing
4. All of the following are normally included in the concept test EXCEPT:
a. detailed financial statements.
b. a description of the product or service.
c. the intended target market.
d. the benefits of the product or service.
5. All of the following are suitable questions to ascertain Product/Service Desirability
EXCEPT:
a. Does it make sense?
b. Is the product or service financially feasible?
c. Is this a good time to introduce the product or service in the market?
d. Are there any fatal flaws in the product or service's basic design or concept?
6. All of the following are characteristics of attractive industries EXCEPT:
a. the industry is young.
b. the industry is fragmented.
c. the industry is crowded.
d. the industry has high operating margins.
7. _____ is conducted to determine whether a proposed business has sufficient
management expertise, organizational competence, and resources to successfully
launch its business.
a. A marketing plan
b. Financial feasibility analysis
1

c. Industry/market feasibility analysis

d. Organizational feasibility analysis
8. The ability to obtain intellectual property protection on key aspects of the business is
most likely an issue related to _____.
a. financial performance of similar firms
b. industry attractiveness
c. resource sufficiency
d. second-mover advantage
9. Which of the following is the final step of a comprehensive feasibility analysis?
a. financial feasibility analysis
b. marketing research
c. filing articles of incorporation
d. industry/market feasibility analysis
10. The projected financial return to assess whether the venture is financially feasible
considers each of the following EXCEPT:
a. availability of equity capital.
b. amount of capital invested.
c. existing alternatives for the money being invested.
d. risks assumed in launching the business.
11. The process of determining if a business idea is viable is the development of a business
plan.
a. True
b. False
12. Many entrepreneurs make the mistake of identifying a business idea and then jumping
directly to writing a business plan to describe and gain support for the idea.
a. True
b. False
13. A concept test is the first physical depiction of a new product.
a. True
b. False

14. Some entrepreneurs conduct their initial product/ service feasibility analysis by simply
talking about their product or service idea with others before deciding to move forward.
a. True
b. False
15. Three important ways to accumulate evidence that there will be healthy demand for a
product or service are with library, Internet and gumshoe research.
a. True

b. False
16. An industry is a group of firms producing a similar product or service.
a. True
b. False
17. A target market is a place within a larger market segment that represents a broader
group of customers with different needs.
a. True
b. False
18. Two of the most important factors related to management prowess are passion for the
business idea and understanding the markets in which the firm will participate.
a. True
b. False
19. The adequacy of the labor pool poses a resource sufficiency issue.
a. True
b. False
20. For feasibility analysis, it is not typically required that an entrepreneur do a rigorous
financial assessment.
a. True
b. False
21. What are the major components of a comprehensive feasibility analysis?

22. Discuss the four step process effective businesses emerge from.