BA109 Chapter 4 - Practice Exam Questions & Answers 100% Correct

T/F The executive summary of a business plan should summarize all of the relevant points of the proposed venture and should be concise-no more than two pages. - ANSWER-True T/F The executive summary serves as the thesis statement for the entire business plan. - ANSWER-False T/F The higher a small business scores on the 5 C's of credit, the greater its chances will be of receiving a loan. - ANSWER-True T/F To get external financing, an entrepreneur's business plan must pass the reality test, the competitive test, and the value test with potential lenders and investors. - ANSWER-True T/F An entrepreneur should prepare a single set of "most likely" financial forecasts for one year into the future as part of the business plan. - ANSWER-False T/F The plan of operation section of the business plan should address how the business plans to retain key managers and employees. - ANSWER-True T/F After presenting the business plan to a group of potential lenders and investors, an entrepreneur should sit back and wait to hear from those who might be interested in the venture. - ANSWER-False T/F The most common reasons banks give for rejecting small business loan applications are undercapitalization and too much debt. - ANSWER-True T/F The "two-thirds rule" says that only two-thirds of the entrepreneurs with a sound new business venture will get financing, that they will get only two-thirds of what they need, and that it will take them two-thirds longer to get it than they anticipated. - ANSWER-True T/F Capital requirements, estimate earnings, and return on investment are three aspects of the financial feasibility analysis. - ANSWER-True T/F Because the entrepreneur is the driving force behind a business idea, he or she should also be the driving force behind the business plan. - ANSWER-True T/F The loan proposal portion of the business plan should include a realistic timetable for repayment or for investors to exit. - ANSWER-True ________ are broad, long-range statements of what a company plans to achieve in the future that guide its overall direction and addresses the question, "Why am I in business?" - ANSWER-Goals T/F Before presenting a business plan to potential lenders and investors, an entrepreneur must be well informed and well prepared. - ANSWER-True T/F The competitive test that a business plan mBA109 Chapter 4 - Practice Exam Questions & Answers 100% Correct