SAMARA UNIVERSITY

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

FINAL EXAM
ACADEMIC YEAR -
2017/2009

SEMESTER-II

COURSE TITLE: ENTREPRENEURSHIP AND ENTERPRISE DEVELOPMENT

MAX. MARK: 50%

COURSE CODE: MGMT 2141

TIME ALLOWED: 1:50 HRS.

PREPARED BY: BELACHEW ABEJE AND THOMAS HAILE

DIRECTIONS:
 THIS BOOKLET CONTAINS FIVE PARTS AND 8PAGES
INCLUDING THE COVER PAGE
 MAKE YOUR CELL PHONE SWITCHED OFF
 CHEATING OR ANY ATTEMPT TO CHEAT WILL INVALIDATE
YOUR RESULTS
 LEGIBLE HAND WRITES FOR ESSAY QUESTIONS WILL HAVE
NONE ZERO CREDIT
 WRITE YOUR ANSWER ON THE ANSWER SHEET ONLY

Name__________________________ Id No Section________

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Continuous assessment (50%) Final exam (50%) Total (100%) Signature

Don’t turn the page until you are told to do so!

Part I: Say true if the statement is right and false if the statement is wrong. (1 pt each)

1. Most readers of a business plans, especially investors, will never read beyond the
summary. Thus, if the summary is not convincing, the reader does not go on to the next
plan.
2. Marketing is barely a set of sales techniques to maintain profit by anticipating and
meeting the needs of the customer.
3. Venture capitalists focus on high risk entrepreneurial businesses.
4. A sole proprietorship is the business of one person, dependently owned and without
partners.
5. Corporation is relatively simple and inexpensive to establish and maintain.
6. Innovation is the ability to develop new ideas and to discover new ways of looking at
problems and opportunities.
7. In Ethiopia the period for registered design is for Five years and which can be extended
for 2 times.
8. Developing a clear profile of potential customers is the basic element of market research.
Part II: Match the elements under “B” section with the elements of “A” section
(1.5pt each)
Column A Column B
1. Equity financing A. is a capital invested in a business by its owners
2. Hire purchase B. is a specialist form of finance to provide working
to young Undercapitalized businesses
3. Factoring C. Provides the immediate use of the asset and also
Ownership of it,
D. allows a small firm to obtain the use of equipment,
Machinery or Vehicles without owning them
4. Low -tech products E. more readily to be understood
F. Can be made easily, marketed quickly
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 5. Information service G. is concerned with processing information, disseminating

Knowledge and facilitating transactions

Part III: choose the best answer and put the answer on the space provided (1
pt each)
1. _________is small groups of people sit together and exchange their ideas freely without
any reservations.
A. Gordon Method
B. Syneptives
C. Brainstorming
D. Prototyping
2. When is a business plan written except?
A. When thinking of going into business
B. Before starting the business
C. When updating the business is required
D. When new information is obtained
E. All
F. None
3. ____________refers to trust things that are alien, and alienate things that are trusted.

A. Gordon Method
B. Syneptives
C. Brainstorming
D. Prototyping
4. Any distinctive word, phrase, symbol, name or logo a firm uses to distinguish itself or its
products is called a:
A. Patent.
B. Copyright.
C. Service mark.
D. None
5. A key aspect of the financial section of the business plan is _________
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 A. A statement of management skills
B. Production capacity
C. description of competitors
D. a realistic sales forecast
E. None

6. Positive external trends or changes that provide unique and distinct possibilities for
innovating and creating value are called _____________.
A. Strengths
B. Environmental scanning
C. Weaknesses
D. Threats
E. None
7. ________ is a legal business entity, created by law and managed through a board of
directors who are responsible to stock holders for appointing and directing operating
officers.
A. Partnership
B. corporations
C. Sole proprietorship
D. Joint Stock Company
E. None
8. Which of the following is not advantage of corporations?
A. Limited liability for investors
B. Access to external resources enhanced through broad networks
C. Assistance and support enhanced through board of directors.
D. Unlimited life as legal entity assures succession and control
E. limited life as legal entity assures succession and control
9. Before preparing the business plan entrepreneur should:
A. Draw key business assumptions on which the plans will be based
B. Market analysis
C. Review available business plan (if any)
D. Seek professional advices
E. All except B

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 10. A patent is a grant of a property right by the government to an inventor. Which of the
following statement is not true about patent?
A. In Ethiopia patent right is for 10 - 20 years
B. Patent provide exclusive rights of ownership to patent holders, their heirs and assigns.
C. Patents are exclusive property rights that can be sold, transferred, willed, licensed, or
used as collateral; much like other valuable assets

D. Most independent investors do not commercialize their inventions or create new

products from their ideas.
E. None
11. _____ is process through which an entrepreneur seeks innovation and employment.
A. Entrepreneurship
B. Venture capital
C. Equity financing
D. Debt financing
E. All
12. . Small scale industries exhibit the following characteristics, except:

A. Independent management
B. Centralized location
C. Local area of operation.
D. Labor intensive
E. All
F. None
13. Which of the following condition is not considered as external environment to be
analyzed during business planning process?
A. Assessing the social and cultural norms of a society in a given period of time
B. assessing various technological know how available to convert the idea into a product
C. assessing the various legislation, policies, incentives, subsides, grants, procedures etc
formulated by government for a particular industry
D. Estimating the cost and level of competition in hiring and retaining the human
resources

14. One of the common mistakes when starting a new business venture is being overoptimistic
about market size. This could be a result of __________
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 A. proper planning
B. focusing on sales volume rather than profit
C. poor market research
D. None

15. The Importance of a Business Plan excludes:

A. It forces you to analyze all facets of your business – good and bad.
B. It sets financial goals and guidelines
C. It convince investors and lenders
D. It establishes operating goals and sets priorities
E. None

16. The technical feasibility analysis should consider various aspects and alternatives of a project
except:

A. Preliminary research and testing

B. Selection of the production process
C. unexpected expenses which can emerge due to change in the external environment
D. Specification of operating and assembly equipment
E. None
17. One of the following is external problems of entrepreneurs?

A. Poor management
B. Poor production
C. Marketing
D. Labor problems
E. All

18. Which one of the following is wrong about Sole proprietorship form of legal ownership of
business?

A. It is one man business

B. It is the simplest

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 C. The sole proprietor himself bears all the risks
D. Limited life
E. Unlimited life

19. Which one of the following is not advantage of going in to small business?

A. Financial opportunity
B. Job Security
C. Family employment
D. Dependence
E. None

Part IV: Fill the blank space (1pt each)

1 __________is everyday information about developments in the marketing environment that

helps managers prepares and adjusts marketing plans

2. ___________ can be defined as a written document prepared by the entrepreneur that describes
all relevant external and internal elements involved in starting a new venture

3. _________ is defined as the “systematic and objective process of gathering, recording, and
analyzing data for aid in making marketing decisions”.

4.________is the process of selling domestic goods or manufactured products to foreign market. 

5.__________is an institution where raw material is purchased from suppliers, converted into a
finished product, using machinery, labor and sold to buyers.

Part V: Essay Questions (10.5 pts)

1. What is market segmentation?(2 pts)

2. To the business you thought in your business plan assignment what form of legal
ownership of a business did you considered? Why?(2 pts)
3. Discuss the product life cycle in detail. (2 pts)

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4. Discuss Michael Porter’s five forces model of competition?(2.5pts)
5. List and explain in detail the two types source of finance?(2pts)