HARAMAYA UNIVERSITY

FRESHMAN PROGRAM DIRECTORATE

COLLEGE OF BUSINESS AND ECONOMICS

DEPARTMENT OF MANAGEMENT

ENTREPRENEURSHIP AND BUSINESS DEVELOPMENT FINAL EXAM

TIME ALLOWED 1:30 HRS.

EXAM WEIGHT: 50%

General Instructions:
 Write your name and ID number on the space provided below
 To make sure that you have the total page of 10 including the cover page
 Read each question carefully
 Switch off your mobile phone
 Make sure that the exam has three parts.
 Write your answers for part I and II on the attached answer sheet and part III on the space
provided below each question
 Any form of misconduct will invalidate your result
 Clear and neat work is rewarded

Student Information:
 Name: _________________________________________
 Id No.: _________________________________________
 Section.________________________________________
 Instructor Name.__________________________________________

1|Page
Answer sheet

Part I: Choose (1.5pt each)

S.no Answer Part II: Matching (1pt.each)

1 1

2 2

3 3

4 4

5 5

10

11

12

13

14

15

16

17

18

19

20

2|Page
Part one: Choose the best answer (1.5 pts. each)

1. The geographical location refers to the premises that will be needed to produce the
products to render service. Which of the following is NOT a location factor that the
entrepreneur should consider in choosing a location for the business?
A. Sources of raw materials
B. The proximity to the customers and access to the markets
C. The size of the building site
D. The availability of power and water at reasonable price
E. None of the above
2. In establishing the presence of competitors, the entrepreneur should ask the following
questions. Which does NOT apply?
A. What is the growth pattern of the competitor’s products?
B. What is the pricing policy of the competitors?
C. What share of the market does the competitor have?
D. None of the above
3. Which of the following is direct distribution channel?
A. Manufacturer--- wholesaler
B. Manufacturer----- retailer
C. Manufacturer----- Agent------Consumer
D. Producer-------final consumer
E. None of the above
4. All are mainstream source of financing a business, except?
A. Equib
B. Edir
C. Traditional source
D. Crowd fund
E. All of the above
5. The firm seeks to achieve growth with existing products in their current market segments
aiming to increase market share.
A. Diversification
B. Product development
C. Market development
D. Market penetration
E. None of the above

3|Page
6. The promotion type that involves short term incentives of value such as discounts, free
samples, and prizes to be offered to arouse interest of customers in buying the
good/service intends to be;
A. Sales promotion
B. Personal selling
C. Advertising
D. Public relations
E. None of the above
7. A pricing policy used to stimulate market growth and capture market share by offering
products at low prices is;
A. Penetration pricing
B. Skimming pricing
C. Market pricing
D. Premium pricing
E. All of the above
8. __________________ is any form nonpaid promotion on significant news or editorial
comment about a company, its practices, its personnel, or its products, is a major
component of the public relations activities of a company.
A. Sale promotion
B. Publicity
C. Personal selling
D. Advertising
E. None of the above
9. Which one of the following is wrong statement about Ansoff Matrix of growth strategy?
A. The market penetration strategy is characterized by the highest level of risk.
B. The market development strategy is when the firm grows by developing new
product for new market
C. Diversification strategy suffers from the lowest level of risk due to incomplete
knowledge, experience and information of the entrepreneur
D. The product development strategy is used when the firm pushes its pre-existing
product to the new market
E. All of the above

4|Page
10. The customer prefers the product that is highly affordable, easily available and cheaply
accessible. This statement is best described by which marketing philosophy?
A. Product concept
B. Production concept
C. Selling concept
D. Societal concept
E. None of the above
11. ABC Company wants to raise capital from internal sources and the source that has been
chosen by the company purchase equity from company ABC expects high return and
growth opportunity. Which type of internal source of equity had ABC company used?
A. Partners
B. Stock selling
C. Angels
D. Venture capital companies
E. None of the above
12. _______________________, is an amount of money that is going to be paid but not yet.
A. Sell on account
B. Account receivable
C. Account payable
D. Selling on credit
E. All except B
13. ____________________refers to informing your customers about your products and
services attracting them to buy them.
A. Product
B. Promotion
C. Place
D. Price
E. None of the above
14. ________________________ is a form of corporate social responsibility dictating those
corporate leaders formulate not only in economic terms (costs versus revenue) but also in
terms of company effects in the social realm and with respect to the environment.
A. Stakeholder Theory
B. Triple bottom line theory
C. Maximization theory
D. None of the above

5|Page
15. Which one of the following is not categorized under the sources of equity finance?
A. Bond
B. Personal saving
C. Relatives and friends
D. Partners
E. None of the above
16. What protects the intellectual property created by inventors?
A. Copyright
B. Trade mark
C. Patents
D. Registered designs
E. None of the above

17. ___________________ refers to the amount of money charged for a product or service.

A. Value
B. Cost
C. Price
D. Wage
E. None of the above
18. The following are correct about the difference between product and service, except?
A. Ownership right can be transferred in both
B. product can be stored as an inventory but service can not
C. product can be intangible but service is not
D. B &C
E. None of the above
19. ___________________________is the total business activity designed to plan, price,
promote and distribute want satisfying products to target market to achieve organizational
goal.
A. Market
B. Marketing
C. Financing
D. None of the above

6|Page
20. Which one is the objective of pricing?
A. Current profit maximization
B. Maximize quantity
C. Quality leadership
D. Survival
E. All

Part II. Matching (1 pts. each)

Section A Section B

1. Market Penetration A. Parallel imports

2. Cost-plus pricing B. price reduction for market
3. Global brand C. Master Card
4. Maturity D. Production cost plus profit margin.
5. Market skimming E. Most profitable stage
F. Slow sale growth
H. set high price
Part III. Discussion part (5pts. each)

1. Explain the criteria bankers use to evaluating the credit worthiness of loan applications
(5pt.)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

7|Page
 ________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

2. Why do Marketers need to conduct competitive analysis? support by examples (5pt)

________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
______________________________________________________________________.
3. Discuss briefly the concept of intellectual property and its terminologies(5pt)
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________

8|Page
 ________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
________________________________________________________________________
_______________________________

9|Page