Exam 15: Succession Planning and Strategies for Harvesting and Ending the Venture

Management buyouts usually involve a ________ of the venture for some predetermined price.

The bankruptcy type that is most common is Chapter 7 bankruptcy.

Given the cultural climate of the United States,business failure and bankruptcy:

When passing down a family business,________ of businesses make it to the third generation.

Because it is so severe,Chapter 7 must always be voluntary.

Which of the following is not an exit strategy

Passing the business to an employee ensures the new principal is familiar with the business and the market.

An ESOP:

In establishing a price for a management buyout the entrepreneur should not include the goodwill value established from past revenue because it can't be quantified.

About 50 percent of family firms successfully make the transition to the second generation.

Suggestions for surviving bankruptcy include all of the following except:

Under Chapter 13,meeting with groups of creditors to amicably solve issues is usually a good idea.

A common reason why companies do not come out successfully from a Chapter 11 bankruptcy is because they

If an entrepreneur recognizes the warning signs of bankruptcy early,he or she may be able to prevent it from occurring.

A "management buyout" is the same thing as an "ESOP."

The most common method of harvesting a venture is through:

It is common for a buyer to purchase a business using notes based on future profits.

Chapter 11 bankruptcy allows a firm to reorganize and prepare strategies to improve future profits.

Identify and define the three major types of bankruptcy.

Chapter 11 is the type of bankruptcy that results in: