DECA Entrepreneurship 3 — Questions and Answers
Question 1: What is the purpose of a non-disclosure agreement (NDA) for entrepreneurs?
- To register a trademark
- To protect confidential business information shared with others (Correct answer)
- To transfer business ownership
- To limit advertising expenses
Correct answer: To protect confidential business information shared with others
An NDA legally binds parties to keep shared confidential information secret, protecting trade secrets and proprietary data.
Question 2: The 'lean startup' methodology encourages entrepreneurs to:
- Minimize staff to reduce payroll
- Build, measure, and learn through rapid experimentation (Correct answer)
- Focus solely on low-cost production
- Avoid outside investment at all costs
Correct answer: Build, measure, and learn through rapid experimentation
The lean startup methodology uses a build-measure-learn feedback loop to test assumptions and pivot quickly based on real customer data.
Question 3: Which term describes the minimum version of a product launched to test core assumptions?
- Final product
- Minimum viable product (MVP) (Correct answer)
- Beta version 2.0
- Market prototype
Correct answer: Minimum viable product (MVP)
A minimum viable product (MVP) has just enough features to validate key assumptions and gather feedback from early adopters.
Question 4: Gross profit is calculated as:
- Revenue minus total expenses
- Revenue minus cost of goods sold (Correct answer)
- Net income plus taxes
- Operating income plus depreciation
Correct answer: Revenue minus cost of goods sold
Gross profit equals revenue minus the cost of goods sold (COGS), before deducting operating expenses.
Question 5: What is 'customer acquisition cost' (CAC)?
- The lifetime value of a customer
- The average sale per customer
- The total cost to gain one new customer (Correct answer)
- The percentage of repeat buyers
Correct answer: The total cost to gain one new customer
CAC measures total sales and marketing spend divided by the number of new customers acquired in a given period.
Question 6: A limited liability company (LLC) combines features of which two business structures?
- Sole proprietorship and corporation
- Partnership and corporation (Correct answer)
- Sole proprietorship and partnership
- Corporation and cooperative
Correct answer: Partnership and corporation
An LLC blends the pass-through taxation of a partnership with the limited liability protection of a corporation.
Question 7: Which market research method collects data from a large group via structured questionnaires?
- Focus group
- Ethnographic observation
- Survey (Correct answer)
- In-depth interview
Correct answer: Survey
Surveys efficiently gather quantitative and qualitative data from many respondents using standardized questions.
DECA Entrepreneurship 3
What is the purpose of a non-disclosure agreement (NDA) for entrepreneurs?