Entrepreneurial Finance correct answers Resource acquisition, allocation of management.
Financial planning and management.
Asset and business valuation.
Cash harvest strategy and contingency planning in the context of a new business.
They have a financial investment in the business.
They hav...
FINC 3620 Exam 1 Smith || A Verified A+ Pass.
Entrepreneurial Finance correct answers Resource acquisition, allocation of management.
Financial planning and management.
Asset and business valuation.
Cash harvest strategy and contingency planning in the context of a new business.
They have a financial investment in the business.
They have personally guaranteed business loans.
Most small businesses are taxed at a personal level. correct answers Why are personal finances
of an entrepreneur intertwined with the startups finances?
Poor preparation, poor timing correct answers Two major causes of failure
Timing considerations correct answers How is the general economic environment? Is there a
sufficient customer base? Will you be first to market?
Preparation Considerations correct answers Work in the industry, form a network, prepare a
feasibility analysis, prepare financially, learn how to separate yourself from the business
1. Small businesses are shifting away from industries with high rates of failure.
2. Less competition due to fewer businesses being formed.
3. Entrepreneurs are evaluating potential businesses more carefully.
4. Small business owners are better educated in how to run a business.
5. Improvements in technology correct answers Why have small business failure rates been
declining in recent years?
Secure funding, consider how you will actually run the business correct answers Why secure a
business plan?
Feasibility Analysis
The business model: How do you plan to make a profit? (subscription based, market place)
Operational structures: How are you going to operate the business?
Marketing plan
Plans for growth: Not all small businesses want a lot of growth (Lifestyle business)--> but most
do.
Pro-forma financials: Educated guess on future financial situation (Estimating expenses,
revenues, and cash flows)
Harvest plan: Getting your money out of the business, separating your financials from the
business financials. correct answers What is in a business plan?
Pass through Entity correct answers a business whose profits are not taxed at the company level,
but instead pass through to the business owners' individual tax returns, where they are taxed
, Exchange Traded Fund (ETF) correct answers a fund that invests in a basket of assets, such as
stocks or bonds, and trades on a regulated exchange like the New York Stock Exchange, as many
individual stocks do
Feasibility Analysis correct answers "a document that concentrates on assessing the likelihood of
economic success of a business, primarily for the benefit of the entrepreneurs contemplating
starting that business"
Strategic Expense Minimization correct answers "a process in which many entrepreneurs engage
before starting a business with the goal of minimizing expected future outlays of cash"
300-850 correct answers What is the range of credit scores?
Certificate of Deposit correct answers "a promissory note whereby a bank promises to return to
the depositor the principal amount deposited with the bank, plus interest, after a stipulated period
of time"
Sole Proprietorship correct answers "a business owned and operated by an individual for profit"
Unlimited Liability
Pass through entity
Cant Sell Stock
Partnership correct answers An association with 2 or more persons who conduct business as co-
owners for profit
Corporation correct answers "a legal entity authorized by state law to act as an artificial person in
order to conduct business or engage in certain other activities"
Limited Liability Company (LLC) correct answers "a hybrid legal business entity authorized by
state law featuring some of the characteristics of both partnerships and corporations"
Accounts Receivable correct answers "the amounts customers owe a company related to their
purchases from that company utilizing the credit or trade credit offered by that company"
Trade Credit correct answers "a business-to-business arrangement by which the customer
business can purchase items from the supplier business on account—paying no cash at the time
of purchase, but instead paying for the items at a later date"
Factor correct answers "a third party who, for a fee, provides a business owner with immediate
cash for accounts receivable and then goes about collecting the accounts receivable themselves"
Bootstrapping correct answers "borrowing non-cash assets, bartering for non-cash assets and
services, and utilizing strategic negotiation tactics in order to avoid, delay or minimize the outlay
of cash "
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