Entrepreneurial Management Test Preparation
Course Introduction
Entrepreneurial Management explores the principles and practices necessary for successfully launching and managing new ventures in dynamic and uncertain environments. The course examines the entrepreneurial mindset, opportunity identification, resource mobilization, business planning, and growth strategies. Students learn how to evaluate business models, assess entrepreneurial risks, secure financing, and cultivate innovation within startups or existing organizations. Through case studies, simulations, and hands-on projects, participants develop practical skills to create, lead, and sustain entrepreneurial enterprises in a competitive global market.
Recommended Textbook
Entrepreneurial Finance 5th Edition by J.
Chris Leach
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16 Chapters
1061 Verified Questions
1061 Flashcards
Source URL: https://quizplus.com/study-set/3606
Page 2
Chapter 1: Introduction to Finance for Entrepreneurs
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91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/71605
Sample Questions
Q1) You have the opportunity of making a $5,000 investment.The outcomes one year from now will be either $5,000 or $6,000 with an equal chance of either outcome occurring.What is the expected rate of return?
A)10%
B)15%
C)20%
D)25%
E)30%
Answer: A
Q2) A study by Phillips and Kirchhoff using Dun & Bradstreet data found that about three-fourths of new firms were still in existence after two years of operation.
A)True
B)False
Answer: True
Q3) One principal of entrepreneurial finance is "risk and expected reward go hand in hand.
A)True
B)False
Answer: True
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Page 3
Chapter 2: Developing the Business Idea
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88 Verified Questions
88 Flashcards
Source URL: https://quizplus.com/quiz/71604
Sample Questions
Q1) When conducting a SWOT analysis,"unfilled customer needs" are examined in terms of:
A)strengths
B)weaknesses
C)opportunities
D)threats
E)a or b
F)c or d
Answer: E
Q2) Determine gross profit of a venture with the following Financial information: cost of goods sold = $30,000; net profit = $17,000; asset turnover = 1.6; return on assets 32%
A)$85,000
B)$72,000
C)$55,000
D)$38,000
Answer: C
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Chapter 3: Organizing and Financing a New Venture
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81 Verified Questions
81 Flashcards
Source URL: https://quizplus.com/quiz/71603
Sample Questions
Q1) Based on 2012 tax schedules,the highest marginal tax rate on personal taxable income is:
A)25.0%
B)28.0%
C)33.0%
D)35.0%
E)40.0%
Answer: D
Q2) Patents that cover most inventions pertaining to new products,services,and processes,are referred to as:
A)design patents
B)plant patents
C)utility patents
D)electrical patents
E)mechanical patents
Answer: C
Q3) Most trademarks take the form of names,words,or graphic designs.
A)True
B)False
Answer: True
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Chapter 4: Preparing and Using Financial Statements
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68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/71602
Sample Questions
Q1) Production assets (e.g.,inventories and equipment to produce products and give credit to customers)usually occurs during the development stage in a new venture's life cycle.
A)True
B)False
Q2) Which of the following is a use of cash?
A)a decrease in inventory
B)an increase in accrued liabilities
C)the sale of an asset for a gain
D)a drop in the amount owed on a bond
E)an increase in stock issued
Q3) Which of the following is not a characteristic of inventories?
A)raw materials
B)finished products
C)goods sold but not yet shipped
D)work-in-process
Q4) On the balance sheet,Total Liabilities = Total Assets - Owners Equity.
A)True
B)False
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Chapter 5: Evaluating Operating and Financial Performance
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64 Verified Questions
64 Flashcards
Source URL: https://quizplus.com/quiz/71601
Sample Questions
Q1) A firm has the following balance sheet information: total assets = $100,000; current assets = $30,000; inventories = $10,000; cash = $5,000; total liabilities = $30,000; current liabilities = $15,000; notes payable = $2,000.What are the firm's quick and NWC-to-Total-Assets ratios?
A)1.00 and .13
B)1.33 and .13
C)1.00 and .15
D)1.33 and .15
Q2) The Return on Assets model states: ROA = net profit margin × asset turnover × the equity multiplier.
A)True
B)False
Q3) Average current assets minus average inventories when divided by average current liabilities is called which of the following ratios?
A)current ratio
B)quick ratio
C)net working capital ratio
D)current liabilities to total debt ratio
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Chapter 6: Managing Cash Flow
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37 Verified Questions
37 Flashcards
Source URL: https://quizplus.com/quiz/71600
Sample Questions
Q1) The actions of monitoring financial performance,determining project cash needs,and obtaining first-round financing occurs during a venture's survival stage.
A)True B)False
Q2) A venture's cash conversion cycle will decrease if the purchase-to-payment conversion period increases.
A)True B)False
Q3) A venture's operating cycle is the same as its cash conversion cycle.
A)True B)False
Q4) Short-term financial planning is critical during the survival stage because operations not yet turning a profit and the associated cash burn often lead to a venture's inability to pay its maturing liabilities.
A)True B)False
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Page 8
Chapter 7: Types and Costs of Financial Capital
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68 Verified Questions
68 Flashcards
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Sample Questions
Q1) Venture investors generally use which one of the following target rates to discount the projected cash flows of ventures in the "startup" stage of their life cycles:
A)20%
B)25%
C)40%
D)50%
Q2) The weighted average cost of capital is simply the blended,or weighted cost of raising equity and debt capital.
A)True
B)False
Q3) Which of the following describes the interest rate in addition to the inflation rate expected on a risk-free loan?
A)real rate
B)nominal rate
C)risk-free rate
D)prime rate
E)inflation rate
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Chapter 8: Securities Law Considerations When Obtaining Venture Financing
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77 Verified Questions
77 Flashcards
Source URL: https://quizplus.com/quiz/71598
Sample Questions
Q1) Rule 504 of Regulation D limits the total number of investors to: A)35
B)100
C)35 unaccredited investors and any number of accredited investors
D)there is no limit on the number of accredited or unaccredited Investors
Q2) Regulation A issuers are allowed to "test the waters" before preparing the offering circular (unlike almost all other security offerings).
A)True
B)False
Q3) Regulation A allows for registration exemptions on private security offerings so long as all investors are considered to be financially sophisticated. A)True B)False
Q4) Investor liability in a proprietorship or corporation is unlimited. A)True B)False
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Chapter 9: Projecting Financial Statements
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61 Verified Questions
61 Flashcards
Source URL: https://quizplus.com/quiz/71597
Sample Questions
Q1) During which round of financing is a venture typically most accurate in forecasting sales?
A)seasoned financing
B)mezzanine financing
C)first round financing
D)startup financing
E)seed financing
Q2) The percent of sales forecasting method must project all cost and balance sheet items at the same growth rate as sales.
A)True
B)False
Q3) "Additional funds needed" (AFN)is the gap remaining between the financial capital needed and that funded by spontaneously generated funds and retained earnings.
A)True
B)False
Q4) Sales forecasting accuracy is usually highest during a venture's startup stage in its life cycle.
A)True
B)False
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Chapter 10: Valuing Early-Stage Ventures
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63 Verified Questions
63 Flashcards
Source URL: https://quizplus.com/quiz/71596
Sample Questions
Q1) The maximum dividend method is
A)the cleanest for valuing assets,but creates problems valuing surplus cash
B)the cleanest for valuation purposes but its dividend-laden financial statements can dramatically understate the firm's cash position
C)the cleanest for cash planning,but creates problems valuing the venture by discounting the dividends
D)calculated by directly discounting the cash flow statement's projected dividend flow to investors,but ignores risks associated with periodic gluts of surplus cash
Q2) "Required cash" is?
A)the cash needed to pay interest expense
B)a valuation method for early stage ventures
C)cash needed to cover a venture's day-to-day operations
D)cash available to pay as a dividend
Q3) A "post-money" valuation differs from a "pre-money" valuation by the cost of financial capital.
A)True
B)False
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12
Chapter 11: Venture Capital Valuation Methods
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55 Verified Questions
55 Flashcards
Source URL: https://quizplus.com/quiz/71595
Sample Questions
Q1) A P/E multiple refers to:
A)price/expectations multiple
B)price/earnings multiple
C)profit/EBIT multiple
D)profit/earnings multiple
E)price/EBITDA multiple
Q2) The two "just-in-time" capital methods are:
A)DDA and VCSC
B)DDA and PDM
C)VSCS and MDM
D)MDM and PDM
Q3) The return on book equity equals the sustainable growth rate when all earnings are paid out in the form of dividends.
A)True
B)False
Q4) What is the post-money valuation?
A)$658,354
B)$499,954
C)$408,377
D)$249,977
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Chapter 12: Professional Venture Capital
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54 Verified Questions
54 Flashcards
Source URL: https://quizplus.com/quiz/71594
Sample Questions
Q1) Term sheets consist of the terms and conditions accompanying an investment,as stipulated by the founders of the venture.
A)True
B)False
Q2) After a new professional venture capital fund is organized,the fund managers:
A)conduct due diligence and actively invest
B)solicit investments and obtain commitments
C)arrange harvest or liquidation
D)identify prospective venture investments and then solicit investments
Q3) When a syndicate of VCs invests in a venture,the investor in charge of organizing the due diligence process is known as the "lead investor."
A)True
B)False
Q4) The establishment of the Small Business Administration was the first major government foray into venture investing.
A)True
B)False
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Chapter 13: Other Financing Alternatives
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61 Verified Questions
61 Flashcards
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Sample Questions
Q1) The SBA approves the standard 7(a)loan and guarantees up to 85% of the loan value.
A)True
B)False
Q2) Microloans in the SBA credit program are made by not-for-profit or government-affiliated Community Development Financial Institutions (CDFIs).
A)True
B)False
Q3) Which of the following is/are not a type of leasing arrangement?
A)factoring
B)capital lease
C)venture lease
D)mortgage lease
E)both a and d
Q4) Warrants are a debt instrument frequently used by commercial banks when financing entrepreneurial ventures.
A)True
B)False
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Chapter 14: Security Structures and Determining Enterprise
Values
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58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/71592
Sample Questions
Q1) A warrant is a type of call option.
A)True
B)False
Q2) An option granting the right to sell a stock at $10 when that stock currently has a market price $8 is "in the money."
A)True
B)False
Q3) If a share of preferred stock has a $10 par value,and the stock has a 2:1 conversion ratio,then the conversion price would be $5.
A)True
B)False
Q4) Owning a put option on a stock is the same as selling a call option on that same stock.
A)True
B)False
Q5) The enterprise value includes the value of the debt,equity,and warrant pieces of a venture.
A)True
B)False
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Chapter 15: Harvesting the Business Venture Investment
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68 Verified Questions
68 Flashcards
Source URL: https://quizplus.com/quiz/71591
Sample Questions
Q1) A leveraged buyout (LBO)is a special type of management buyout (MBO).
A)True
B)False
Q2) The NYSE participates in:
A)the sale of new securities to private investors
B)primary offerings
C)secondary offerings
D)b and c
Q3) When harvesting a venture,the outright purchase of the going concern by managers,employees,or external buyers is known as going public.
A)True
B)False
Q4) The two discounted cash flow (DCF)methods covered in this text are the enterprise method and the debt funds method.
A)True
B)False
Q5) ESOP stands for "employee stock ownership plan."
A)True
B)False
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Chapter 16: Financially Troubled Ventures: Turnaround Opportunities
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67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/71590
Sample Questions
Q1) During the rapid growth stage of a venture's life cycle,which of the following is not a basis for operating or financial decisions?
A)creating and building value
B)obtaining additional financing
C)choosing the organizational structure
D)examining exit opportunities
Q2) During the development,startup,and survival stages of a venture's life cycle,the relevant financing and operating decisions faced are either restructuring or liquidating.
A)True
B)False
Q3) Your firm has inventory of $188,000,cost of goods sold of $522,000,and accounts receivable of $214,000.What is your inventory conversion period?
A)131 days
B)152 days
C)168 days
D)98 days
E)76 days
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Page 18