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This test consists of 15 multiple choice questions and 5 short answer questions.

Multiple Choice Questions

1. It cost Kroc how much to buyout the Frejlack Ice Cream interest in McDonalds?
(a) $50,000.
(b) $5,000.
(c) $25,000.
(d) $10,000.

2. How much money did McDonald's have to raise to pay off the mechanic's liens?
(a) $400,000.
(b) $125,000.
(c) $250,000.
(d) $1 million.

3. What percent of gross sales did Kroc receive from the franchises?
(a) 1.5%
(b) 1.9%
(c) 2%
(d) 1%

4. What does Kroc describe as 'the most joyous kind of executive experience'?
(a) Making money.
(b) Watching the brand name become known.
(c) Making important decisions.
(d) Watching his creation grow as the result of good decision making.

5. The effects of the purchasing system Kroc devised was to:
(a) Raise costs for the franchise owner.
(b) Avoid anti-trust problems at a later time.
(c) Guarantee profits for Kroc.
(d) Allow franchise owners to buy from whomever they wanted.

6. Kroc flew to California:
(a) On a routine sales call.
(b) To view the operation of the McDonald brothers.
(c) For a vacation.
(d) To see customers for paper cups.

7. What job did Ray hold in the Chicago financial market?
(a) Stock broker
(b) Runner.
(c) Board marker.
(d) Stock trader.

8. What did Kroc envision after talking to the McDonald's?
(a) McDonald restaurants across the country.
(b) Recommendations for improvement.
(c) Opening his own chain of restaurants.
(d) An operation that needed improvement.

9. How did McDonalds manage to borrow $1.5 million from three insurance companies?
(a) In exchange for 22.5% of their stock.
(b) By improving their balance sheet.
(c) By signing guarantees.
(d) By give them managing control.

10. Kroc and his staff decided that the best growth path was to:
(a) Limit franchise sales to maintain high prices.
(b) Open anywhere the franchise buyer wanted.
(c) Select locations and develop the restaurants themselves.
(d) Own the restaurants themselves.

11. Kroc views all of the following as McDonald's strengths:
(a) Service.
(b) Quality.
(c) Convenience.
(d) Value.

12. Why did the brothers refuse Kroc's original offer?
(a) They didn't trust him.
(b) They wanted more money.
(c) They were happy with their situation and wanted to enjoy life.
(d) They didn't have the money.

13. What function did Clem Bohr fulfill?
(a) Finding ideal locations for McDonald's restaurants in different parts of the country.
(b) Develop a purchasing system.
(c) Develop a financing program.
(d) Train new employeers.

14. The first business Ray opened was:
(a) A music store.
(b) A delivery service.
(c) A restaurant.
(d) A talent agency.

15. Who did Kroc used to work for?
(a) The state of California.
(b) Ford Motor Company.
(c) Hoover Company.
(d) Lily Tulip Cup Company.

Short Answer Questions

1. Kroc's view on taking risks is that risk:

2. What word does Kroc use to describe Ethel's reaction to his new venture?

3. Kroc's original contact with the McDonald brothers provided that each franchise unit:

4. Who were the early McDonald franchises sold to?

5. Kroc feels that people can accomplish:

(see the answer keys)

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