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

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

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

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

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

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

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

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

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

6 Which of the following represents a Latent Need?

A. A need that is currently satisfied by existing products
B. A need mandated by government regulation
C. A need the customer is fully aware of and actively seeking
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. Machinery
B. Cash
C. Raw Materials
D. Brand Reputation

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

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

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

A. To determine if a detailed feasibility study is justified
B. To hire the project manager
C. To launch the marketing campaign
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 will generate enough profit
D. Whether the project is legally permissible

11 Which sector does a Consultancy Firm fall under?

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

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

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

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

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

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

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

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

17 Which of the following is a Manufacturing opportunity?

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

18 What is the Payback Period?

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

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

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

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

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

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

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

22 If , the project is generally considered:

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

23 Which source of information is considered Primary Data?

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

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

A. Legal and Environmental Feasibility
B. Financial Feasibility
C. Market Feasibility
D. Managerial 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. Physical assets only
B. Perishable (Time-dependent)
C. Highly durable
D. Easy to stockpile

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

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

28 What is Market Saturation?

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

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

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

30 In project selection, Scalability refers to:

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

31 Which represents a Technological Opportunity?

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

32 What is the Gestation Period of a project?

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

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

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

34 Trend spotting helps in:

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

35 Food Processing is an example of:

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

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

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

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

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

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

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

39 Operational Feasibility asks:

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

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

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

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

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

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

44 A Project Report is primarily used to:

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

45 In manufacturing, Capacity Utilization refers to:

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

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

A. A movie theater
B. A retail grocery store
C. A corporate payroll processing firm
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. High footfall and visibility
D. Proximity to raw materials

48 The Contribution Margin per unit is calculated as:

A.
B.
C.
D.

49 Which of the following indicates a Saturated Market?

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

50 Why is Government Policy a critical source of information?

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