Entrepreneurship- Chapter 10 Exam Questions and Correct Answers Latest Update 2024 (Already Passed)
inDinero, the company profiled in the opening feature for Chapter 10, is described by its cofounders as "the fastest way for small businesses to manage their finances." Which of the following is not...
inDinero, the company profiled in the opening feature for Chapter 10, is described by its cofounders as
"the fastest way for small businesses to manage their finances." Which of the following is not true about
inDinero's founding story?
A) In 2009, inDineor's founders applied to TechStars, which is a Boulder, CO-based seed-stage
fund/incubator, and were turned down.
B) The idea for inDinero originated in mid-2009 while its cofounders were still in college.
C) In April 2010, the founders of inDinero applied to Y Combinator, an organization that provides seed-
stage funding, mentorship, and networking opportunities to participants, and were turned down.
D) inDinero reportedly has over 15,000 users .
E) In late 2009 and early 2010, the founders of inDinero tried to raise angel funding and were
unsuccessful. - Answers C
According to the textbook, many entrepreneurs go about the task of raising capital haphazardly
because:
A) they are uncomfortable talking about money and they haven't written a business plan
B) they lack experience in this area and because they don't know much about their choices
C) they are focused on the nuts and bolts of starting their business
D) they haven't completed a feasibility analysis or business plan
E) they are intimidated by the process and they are unsure of how much money they need - Answers B
Kimberly Jones is the founder of a company in the medical equipment industry. Kimberly's firm is still in
the feasibility analysis stage and doesn't have a product that is ready to sell. The company is spending
about $25,000 per month and expects to maintain that level of spending until it reaches profitability.
The $25,000 a month is Kimberly's:
A) consumption rate
B) utilization rate
C) burn rate
D) usage rate
E) liquidity rate - Answers C
, The three reasons startups need funding are:
A) cash flow challenges, capital investments, and lengthy product development cycles
B) business research, cash flow challenges, and costs associated with building a brand
C) bonuses for members of the new venture team, attorney fees, and lengthy product development
cycles
D) attorney fees, capital investments, and marketing research
E) bonuses for members of the new venture team, marketing research, and personnel costs - Answers A
In startup firms, inventory must be purchased, employees must be trained and paid, and advertising
must be paid for before cash is generated from sales. Which of the following reasons that motivate firms
to seek funding or financing is illustrated in this example?
A) cash flow challenges
B) marketing costs
C) personnel costs
D) capital investments
E) lengthy product development cycles - Answers A
For startup firms, the cost of buying real estate, building facilities, and purchasing equipment often
exceeds the firm's ability to provide funds for those needs on its own. Which of the following reasons
that motivate firms to seek funding or financing is illustrated in this example?
A) lengthy product development cycles
B) costs associated with building a brand
C) cash flow challenges
D) capital investments
E) personnel costs - Answers D
Peter Simmons owns an electronic games company. Although Peter's game designers and programmers
are very good, it takes 2-3 years to develop a good electronic game. This example illustrates the need for
funding or financing referred to as:
A) personnel costs
B) marketing costs
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