Exam 1: Introduction to Finance for Entrepreneurs

Financial distress occurs when cash flow is insufficient to meet current debt obligations.

Financial markets where customized contracts or securities are negotiated, created, and held with restrictions on how they can be transferred are called:

Mezzanine financing is temporary financing needed to keep the venture afloat until the next offering.

The last stage in a successful venture's life cycle is called the:

One principal of entrepreneurial finance is "risk and expected reward go hand in hand.

While cash is the language of business, accounting is the currency.

Free cash flow is the net income forecast to be available to the venture's owners over time.

Small high-technology firms are responsible for twice as many product innovations per employee and obtain more patents per sales dollar than large high-technology firms.

Obtaining bank loan, issuing bonds, and issuing stock is characteristic of which type of financing during the venture's life cycle?

Which of the following is considered to be an "agency" conflict?

In 1982, Harry Dent identified several major or megatrends shaping U.S. society and the world.

About 60 percent of all newly created businesses in the U.S. are dissolved or cease operations within how many years after being started?

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.

Private financial markets are a place where standardized contracts or securities are traded on organized security exchanges with restrictions on how they can be transferred.

Entrepreneurs provide the financing to individuals who think, reason, and act to convert ideas into commercial opportunities and create opportunities.

A project requires an initial investment of $1,000,000. In one year, there is a 40% chance of a $950,000 return; a 50% chance of a $1,200,000 return; and a 10% chance of a $2,000,000 return. What is the project's expected return one year from now?

Nearly half of business failures are due to economic factors such as inadequate sales, insufficient profits, and industry weakness.

The type of financing that occurs during the survival stage of a venture's life cycle is typically referred to as the:

Which of the following advise and assist corporations on the type, timing, and costs of issuing new debt and equity securities and facilitate the sale of firms?

Which stage in the venture life cycle is characterized by creating and building value, obtaining additional financing, and examining opportunities?