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Unit 2: Business Opportunity - Practice Quiz

ERT425 — Entrepreneurship And Business Basics 50 Questions
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1 What is the primary objective of Environment Scanning in entrepreneurship?

A. To hire the best employees for the organization
B. To identify opportunities and threats affecting the business
C. To calculate the exact profit margin of a future project
D. To design the logo and branding materials

2 Which framework is commonly used to analyze the macro-environment of a business opportunity?

A. PESTLE Analysis
B. Maslow's Hierarchy
C. PERT Analysis
D. Inventory Turnover Ratio

3 In SWOT analysis, which two components refer to external factors?

A. Weaknesses and Threats
B. Opportunities and Threats
C. Strengths and Weaknesses
D. Strengths and Opportunities

4 Which of the following is considered a demographic factor during environment scanning?

A. Inflation rate
B. Technological obsolescence
C. Population age structure
D. Environmental pollution laws

5 When assessing business needs, 'Need Assessment' primarily helps an entrepreneur to:

A. Copy exactly what the competitor is doing
B. Avoid paying taxes
C. Determine the stock price of the company
D. Identify the gap between current reality and desired future results

6 Which of the following represents a Latent Need?

A. A need mandated by government regulation
B. A need the customer is fully aware of and actively seeking
C. A need that is currently satisfied by existing products
D. A need that customers are not consciously aware of until a solution is presented

7 In the context of Resource Assessment, which of the following is an Intangible Resource?

A. Cash
B. Raw Materials
C. Brand Reputation
D. Machinery

8 Which of the following is a Secondary Source of information for business opportunity identification?

A. Direct observation of competitors
B. Conducting personal interviews
C. Distributing surveys to potential customers
D. Government census reports

9 What is the primary purpose of a Pre-Feasibility Study?

A. To launch the marketing campaign
B. To determine if a detailed feasibility study is justified
C. To hire the project manager
D. To secure final funding from a bank

10 When selecting a viable project, Technical Feasibility assesses:

A. Whether the technology and skills required are available
B. Whether the marketing strategy is sound
C. Whether the project is legally permissible
D. Whether the project will generate enough profit

11 Which sector does a Consultancy Firm fall under?

A. Manufacturing Sector
B. Primary Sector
C. Extraction Sector
D. Service Sector

12 Which of the following is a key characteristic of a Manufacturing business opportunity?

A. Inseparability of production and consumption
B. Intangibility of output
C. Tangible output and inventory capability
D. High reliance on direct customer interaction during production

13 The Break-Even Point (BEP) is the point where:

A. Total Revenue > Total Cost
B. Total Revenue = Total Cost
C. Fixed Cost = Variable Cost
D. Total Revenue < Total Cost

14 Calculate the Break-Even Point in units if Fixed Cost is $10,000, Selling Price per unit is $50, and Variable Cost per unit is $30.

A. 300 units
B. 1000 units
C. 500 units
D. 200 units

15 Which analysis is used to determine the Commercial Viability of a project?

A. Analyzing the tensile strength of materials
B. Employee background checks
C. Market demand and supply analysis
D. Code of conduct assessment

16 In the context of Financial Feasibility, what does ROI stand for?

A. Return on Investment
B. Rate of Inflation
C. Risk of Insolvency
D. Return on Inventory

17 Which of the following is a Manufacturing opportunity?

A. Opening a gym
B. Providing legal counsel
C. Running a digital marketing agency
D. Starting a textile mill

18 What is the Payback Period?

A. The time taken to pay employee salaries
B. The time taken to recover the initial cost of investment
C. The time taken to manufacture one unit
D. The duration of the bank loan

19 During Resource Assessment, evaluating 'Manpower' refers to:

A. Availability of electrical power
B. Availability of skilled and unskilled labor
C. Availability of raw materials
D. Availability of machinery

20 Which of the following is a Political Factor in environment scanning?

A. Consumer disposable income
B. Level of education in society
C. Rate of technological change
D. Changes in tax policy and trade tariffs

21 The NPV (Net Present Value) method is used for:

A. Evaluating the profitability of a project using time value of money
B. Calculating the number of competitors
C. Recruiting staff
D. Assessing the quality of raw materials

22 If , the project is generally considered:

A. Technically impossible
B. Financially unviable
C. Financially viable
D. Legally void

23 Which source of information is considered Primary Data?

A. Focus group discussions initiated by the entrepreneur
B. Industry association newsletters
C. Economic survey of the country
D. Competitor annual reports

24 Which feasibility study aspect deals with pollution control and waste disposal compliance?

A. Legal and Environmental Feasibility
B. Market Feasibility
C. Managerial Feasibility
D. Financial Feasibility

25 The formula for Return on Investment (ROI) is approximately:

A.
B. concept
C.
D.

26 In the service sector, inventory is often described as:

A. Highly durable
B. Physical assets only
C. Easy to stockpile
D. Perishable (Time-dependent)

27 A business opportunity that relies heavily on intellectual property and expertise is likely in which sector?

A. Heavy Manufacturing
B. Agriculture
C. Knowledge/Service Sector
D. Mining

28 What is Market Saturation?

A. When government subsidizes the market
B. When a market is rapidly growing
C. When there are no competitors
D. When the volume of a product or service has maximized in a marketplace

29 Which of the following is an Economic Factor in PESTLE?

A. Patent laws
B. Interest rates and exchange rates
C. Climate change
D. Lifestyle changes

30 In project selection, Scalability refers to:

A. The ability to weigh raw materials
B. The number of legal cases against the company
C. The physical size of the factory
D. The ability of the business to grow revenue faster than costs

31 Which represents a Technological Opportunity?

A. Rising aging population
B. Emergence of AI and Automation tools
C. Decrease in raw material tax
D. New labour laws

32 What is the Gestation Period of a project?

A. The fiscal year duration
B. The time between idea generation and commercial production
C. The lunch break duration for employees
D. The validity period of a patent

33 Which factor is Internal to the entrepreneur during resource assessment?

A. Venture Capital
B. Personal savings and skills
C. Government Grants
D. Bank Loans

34 Trend spotting helps in:

A. Reducing product quality
B. Predicting future market needs and opportunities
C. Calculating historical taxes
D. Ignoring customer preferences

35 Food Processing is an example of:

A. IT Industry
B. Financial Institution
C. Service Industry
D. Agro-based Manufacturing Industry

36 What is DSCR (Debt Service Coverage Ratio) used to assess?

A. Ability to service/pay back debt obligations
B. Employee satisfaction
C. Machine depreciation
D. Marketing efficiency

37 Which of the following creates a Legal Barrier to entry for a new project?

A. Availability of cheap labor
B. Low interest rates
C. High customer demand
D. Patents held by competitors

38 Which of the following is NOT a criterion for selecting a viable project?

A. Market Potential
B. Risk Factors
C. Investment Availability
D. Personal Hobby (irrespective of profit)

39 Operational Feasibility asks:

A. Is the technology available?
B. Can we afford it?
C. Will it work in our organization's culture and processes?
D. Is it legal?

40 In a Cost-Benefit Analysis, a project is viable if:

A. Benefits are zero
B. Costs > Benefits
C. Costs = Benefits
D. Benefits > Costs

41 Which refers to the Voice of the Customer (VOC)?

A. The CEO's speech
B. Feedback and preferences directly from the customer
C. Advertising slogans
D. Employee complaints

42 What is an Opportunity Cost in project selection?

A. The cost of hiring a consultant
B. The potential benefit lost by choosing one alternative over another
C. The entry fee for a trade show
D. The cost of marketing opportunities

43 Which of the following is a Social Factor affecting business opportunity?

A. Raw material cost
B. Lifestyle trends towards health and wellness
C. Internet speed
D. Corporate Tax Rate

44 A Project Report is primarily used to:

A. Present the roadmap and feasibility to investors/lenders
B. List the personal expenses of the owner
C. Record daily attendance
D. Decorate the office

45 In manufacturing, Capacity Utilization refers to:

A. The number of trucks owned
B. The percentage of total potential output actually being produced
C. The amount of electricity used
D. The size of the warehouse

46 Which is an example of a B2B (Business to Business) service opportunity?

A. A retail grocery store
B. A corporate payroll processing firm
C. A movie theater
D. A hair salon

47 Location is a critical viability factor. For a retail store, the most important location attribute is usually:

A. Remote quiet area
B. Proximity to industrial waste disposal
C. Proximity to raw materials
D. High footfall and visibility

48 The Contribution Margin per unit is calculated as:

A.
B.
C.
D.

49 Which of the following indicates a Saturated Market?

A. Customers asking for products that don't exist
B. Prices dropping due to fierce competition
C. Only one company providing the service
D. High profit margins for all players

50 Why is Government Policy a critical source of information?

A. It provides the technology for production
B. It guarantees profit
C. It tells you which employees to hire
D. It dictates subsidies, incentives, and banned sectors
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