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Unit 2 - Practice Quiz

ERT425

1 What is the primary objective of Environment Scanning in entrepreneurship?

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

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

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

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

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

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

6 Which of the following represents a Latent Need?

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

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

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

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

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

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

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

10 When selecting a viable project, Technical Feasibility assesses:

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

11 Which sector does a Consultancy Firm fall under?

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

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

A. Intangibility of output
B. Inseparability of production and consumption
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. Total Revenue = Total Cost
D. Fixed Cost = Variable Cost

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

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

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

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

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

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

17 Which of the following is a Manufacturing opportunity?

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

18 What is the Payback Period?

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

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

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

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

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

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

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

22 If , the project is generally considered:

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

23 Which source of information is considered Primary Data?

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

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

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

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

A.
B.
C. concept
D.

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

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

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

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

28 What is Market Saturation?

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

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

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

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 number of legal cases against the company
D. The physical size of the factory

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

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

35 Food Processing is an example of:

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

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

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

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

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

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

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

39 Operational Feasibility asks:

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

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

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

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

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

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

44 A Project Report is primarily used to:

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

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 number of trucks owned
D. The amount of electricity used

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

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

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

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

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