Exam 1: Introduction to Finance for Entrepreneurs

Environmental commerce, or e-commerce, involves the use of electronic means to conduct business online.

During a venture's rapid growth stage, funds for plant expansion, marketing expenditures, working capital, and product or service improvements is obtained through?

Entrepreneurial opportunities can occur only when there are societal changes in the world.

Which is not a major source of start-up financing for a venture's startup stage?

Owner-manager agency) conflicts are differences between manager's self-interest and that of the owners who hired the manager.

Bill Gates once said: "I was seldom able to see an opportunity, until it ceased to be one."

One study of Inc. magazine's 500 high-growth firms suggests that about 88 percent of founders feel their firms' successes are due to extraordinary ideas, while the remaining 12 percent feel their firms' successes are due to exceptional execution of ordinary ideas.

Entrepreneurial finance is the application and adaptation of financial tools and techniques to the planning, funding, operations, and valuation of an entrepreneurial venture.

Although the risks associated with starting a new entrepreneurial venture are large, there is always room for one more success.

Disruptive innovation is an innovation that creates a new market or network that disrupts and displaces an existing market or network.

In Chapter I five mega-trend categories are identified as sources of entrepreneurial opportunities.

Free cash exists when cash exceeds that which is needed to operate, pay creditors, and invest in assets.

"Fads" are large societal, demographic, or technological trends or changes that are slow in forming but once in place continue for many years.

Entrepreneurship is the process of changing ideas into commercial opportunities and creating value.

Maximizing the value of the venture to its owners is the common financial goal of which of the following?

Assume that you can sell a new product at $5.00 per unit. Your variable costs are $3.00 per unit and you fixed costs are $20,000. What is your breakeven point in sales units?

Which of these statements is correct?

At which stage of the venture's life cycle stage is best characterized by the period when revenues start to grow and when cash flows from operations begin covering cash outflows?

"Fads" are not predictable, have short lives, and do not involve macro changes.

The Office of Advocacy of the U.S. Small Business Administration documents that "employer firm births" have exceeded 700,000 annually in recent years.