Entrepreneurs and business planning: Practice Questions

Which characteristic is an entrepreneur most likely to demonstrate when they commit capital to a new venture despite the possibility of failure?

An entrepreneur decides to spend \(£20,000\) on a new marketing campaign instead of upgrading factory machinery. What economic concept does the lost benefit of not upgrading the machinery represent?

A public limited company is evaluating whether to switch from low-cost plastic packaging to fully biodegradable material. The switch will increase production costs by \(8\%\), but will significantly reduce environmental pollution in the local community.
Which of the following represents the fundamental conflict inherent in this decision?

In the acronym SMART for business objectives, what does the letter T represent?

A business had \(£200\,000\) to invest. It chose to allocate the entire amount to Project A, which generated a net gain of \(£40\,000\). If it had invested in Project B instead, it would have generated a net gain of \(£65\,000\).
What was the opportunity cost of choosing Project A?

State one financial and one non-financial reason why an entrepreneur might decide to start a new business.