Exam 14: Accessing Resources for Growth From External Sources

Discuss the main advantages of an acquisition.

In a leveraged buyout,the entrepreneur uses equity funds to purchase an existing venture for cash.

One advantage of franchising is that the entrepreneur usually enters into a business that has an accepted name and product.

In most ________,the debt capital usually exceeds the equity by a ratio of 5:1.

In order for a joint venture to be successful:

Which of the following would be a quantitative way to ascertain the fairness of an LBO's asking price

The most common type of franchise is the dealership.

A joint venture is the purchase of an entire company,or part of a company.

International joint ventures are decreasing in popularity.

A new franchisee can be expected to be required to undergo considerable training on operating the business.

When negotiating,the entrepreneur should make only one offer and stick to it.

A ________ occurs when an entrepreneur or an employee group uses borrowed funds to purchase an existing venture for cash.

The drawbacks usually outweigh the benefits of establishing international joint ventures.

The bootstrap purchase of assets:

Growing a venture through franchising allows the venture to expand quickly using little capital.

For the franchisor,the capital required to expand a venture quickly is more than it would be without franchising.

The U.S.Department of Justice frequently issues guidelines for different types of mergers.

Which of the terms in a franchise agreement is the most likely cause of a lawsuit

The two most common means of acquisition are the entrepreneur's direct purchase of the firm's entire stock or assets or the bootstrap purchase of these assets.

A common procedure to determine the value of a merger candidate is to estimate the present value of ________ and the expected after-tax earnings attributable to the merger.