Question 1

"Contribution profit margin" is the portion of the sale of a product that contributes to covering the cash fixed costs.

Accepted Answer

A) True 
 B)False

Question 2

GAAP stands for "Generally Accepted Accounting Principles."

Accepted Answer

A) True 
 B)False

Question 3

A firm's net operating profit after taxes (NOPAT)is calculated as:

Accepted Answer

A) net profit 
B) EBIT times one minus the tax rate 
C) EBT minus interest paid 
D) EBIT times the tax rate 
A) net profit 
B) EBIT times one minus the tax rate 
C) EBT minus interest paid 
D) EBIT times the tax rate

Question 4

Which of the following is not a characteristic of inventories?

Accepted Answer

A) raw materials 
B) finished products 
C) goods sold but not yet shipped 
D) work-in-process 
A) raw materials 
B) finished products 
C) goods sold but not yet shipped 
D) work-in-process

Question 5

Net cash burn occurs when the sum of cash flows from operations and investing is positive.

Accepted Answer

A) True 
 B)False

Question 6

Total operating fixed costs (TOFC)equal:

Accepted Answer

A) cash operating fixed costs (excluding interest expenses) 
B) noncash fixed costs (e.g.,depreciation) 
C) interest expenses 
D) a plus b 
E) a plus b plus c 
A) cash operating fixed costs (excluding interest expenses) 
B) noncash fixed costs (e.g.,depreciation) 
C) interest expenses 
D) a plus b 
E) a plus b plus c

Question 7

Operating income,or earnings before interest and taxes,reflects the firm's profits after all operating expenses,excluding financing costs,have been deducted from net sales.

Accepted Answer

A) True 
 B)False

Question 8

Your venture has total assets of $690,net fixed assets of $500,long term debt of $80,and stockholders' equity of $400.What is the amount of your venture's current liabilities?

Accepted Answer

A) -$100 
B) $100 
C) $210 
D) $290 
E) $1,090 
A) -$100 
B) $100 
C) $210 
D) $290 
E) $1,090

Question 9

According to Appendix A of Chapter 4,NOPAT is defined as:

Accepted Answer

A) revenues times (1 + tax rate) 
B) revenues times (1 - tax rate) 
C) EBITDA times (1 - tax rate) 
D) EBIT times (1 - tax rate) 
E) net income times (1 + tax rate) 
A) revenues times (1 + tax rate) 
B) revenues times (1 - tax rate) 
C) EBITDA times (1 - tax rate) 
D) EBIT times (1 - tax rate) 
E) net income times (1 + tax rate)

Question 10

"Net cash burn" occurs when the sum of which of the following items is negative?

Accepted Answer

A) cash flows from operations and financing 
B) cash flows from investing and financing 
C) cash flows from operations and investing 
D) cash flows from net income and depreciation 
E) cash flows from operations and net income 
A) cash flows from operations and financing 
B) cash flows from investing and financing 
C) cash flows from operations and investing 
D) cash flows from net income and depreciation 
E) cash flows from operations and net income

Question 11

Last year,Beth's Baked Goods exactly broke even with cash fixed costs of $63,000.If its breakeven survival revenue level was $94,000,what was its variable cost revenue ratio (VCRR)?

Accepted Answer

A) .27 
B) .30 
C) .33 
D) .67 
A) .27 
B) .30 
C) .33 
D) .67

Question 12

Amounts owed to another for purchase made on credit which come due in less than one year are known as receivables.

Accepted Answer

A) True 
 B)False

Question 13

EBDAT stands for "Earnings Before Depreciation And Taxes".

Accepted Answer

A) True 
 B)False

Question 14

Which one of the following is not considered to be a current asset?

Accepted Answer

A) cash 
B) receivables 
C) inventories 
D) fixed assets 
A) cash 
B) receivables 
C) inventories 
D) fixed assets

Question 15

Financial statement that reports the revenues generated and expenses incurred over an accounting period is called the

Accepted Answer

A) income statement 
B) balance sheet 
C) statement of retained earnings 
D) statement of cash flows 
A) income statement 
B) balance sheet 
C) statement of retained earnings 
D) statement of cash flows

Question 16

"Cost of goods sold" is the cost of materials,labor,and advertising incurred to produce the products that were sold.

Accepted Answer

A) True 
 B)False

Question 17

"Retained earnings" is:

Accepted Answer

A) a corporate asset 
B) part of owners' equity 
C) neither a or b 
D) both a and b 
A) a corporate asset 
B) part of owners' equity 
C) neither a or b 
D) both a and b

Question 18

Startup financing (e.g.,financing from business angels and venture capitalists)usually occurs during the development stage in a new venture's life cycle.

Accepted Answer

A) True 
 B)False

Question 19

What is the survival revenues breakeven based on the following: Administrative expenses = $200,000; Marketing expenses = $180,000; Depreciation expenses = $100,000; and Interest expenses = $20,000; and a variable cost revenue ratio = .50?

Accepted Answer

A) $400,000 
B) $600,000 
C) $800,000 
D) $1,000,000 
E) $1,200,000 
A) $400,000 
B) $600,000 
C) $800,000 
D) $1,000,000 
E) $1,200,000

Question 20

Seed financing (e.g.,financing from the entrepreneur's assets,family,and friends)usually occurs during the development stage in a new venture's life cycle.

Accepted Answer

A) True 
 B)False

"Contribution profit margin" is the portion of the sale of a product that contributes to covering the cash fixed costs.

GAAP stands for "Generally Accepted Accounting Principles."

A firm's net operating profit after taxes (NOPAT)is calculated as:

Which of the following is not a characteristic of inventories?

Net cash burn occurs when the sum of cash flows from operations and investing is positive.

Total operating fixed costs (TOFC)equal:

Operating income,or earnings before interest and taxes,reflects the firm's profits after all operating expenses,excluding financing costs,have been deducted from net sales.

Your venture has total assets of $690,net fixed assets of $500,long term debt of $80,and stockholders' equity of $400.What is the amount of your venture's current liabilities?

According to Appendix A of Chapter 4,NOPAT is defined as:

"Net cash burn" occurs when the sum of which of the following items is negative?

Last year,Beth's Baked Goods exactly broke even with cash fixed costs of $63,000.If its breakeven survival revenue level was $94,000,what was its variable cost revenue ratio (VCRR)?

Amounts owed to another for purchase made on credit which come due in less than one year are known as receivables.

EBDAT stands for "Earnings Before Depreciation And Taxes".

Which one of the following is not considered to be a current asset?

Financial statement that reports the revenues generated and expenses incurred over an accounting period is called the

"Cost of goods sold" is the cost of materials,labor,and advertising incurred to produce the products that were sold.

"Retained earnings" is:

Startup financing (e.g.,financing from business angels and venture capitalists)usually occurs during the development stage in a new venture's life cycle.

What is the survival revenues breakeven based on the following: Administrative expenses = $200,000; Marketing expenses = $180,000; Depreciation expenses = $100,000; and Interest expenses = $20,000; and a variable cost revenue ratio = .50?

Seed financing (e.g.,financing from the entrepreneur's assets,family,and friends)usually occurs during the development stage in a new venture's life cycle.

Introduction to Finance for Entrepreneurs

Developing the Business Idea

Organizing and Financing a New Venture

Evaluating Operating and Financial Performance

Managing Cash Flow

Types and Costs of Financial Capital

Securities Law Considerations When Obtaining Venture Financing

Projecting Financial Statements

Valuing Early-Stage Ventures

Venture Capital Valuation Methods

Professional Venture Capital

Other Financing Alternatives

Security Structures and Determining Enterprise Values

Harvesting the Business Venture Investment

Financially Troubled Ventures: Turnaround Opportunities

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Exam 4: Preparing and Using Financial Statements

"Contribution profit margin" is the portion of the sale of a product that contributes to covering the cash fixed costs.

GAAP stands for "Generally Accepted Accounting Principles."

A firm's net operating profit after taxes (NOPAT)is calculated as:

Which of the following is not a characteristic of inventories?

Net cash burn occurs when the sum of cash flows from operations and investing is positive.

Total operating fixed costs (TOFC)equal:

Operating income,or earnings before interest and taxes,reflects the firm's profits after all operating expenses,excluding financing costs,have been deducted from net sales.

Your venture has total assets of $690,net fixed assets of $500,long term debt of $80,and stockholders' equity of $400.What is the amount of your venture's current liabilities?

According to Appendix A of Chapter 4,NOPAT is defined as:

"Net cash burn" occurs when the sum of which of the following items is negative?

Last year,Beth's Baked Goods exactly broke even with cash fixed costs of $63,000.If its breakeven survival revenue level was $94,000,what was its variable cost revenue ratio (VCRR)?

Amounts owed to another for purchase made on credit which come due in less than one year are known as receivables.

EBDAT stands for "Earnings Before Depreciation And Taxes".

Which one of the following is not considered to be a current asset?

Financial statement that reports the revenues generated and expenses incurred over an accounting period is called the

"Cost of goods sold" is the cost of materials,labor,and advertising incurred to produce the products that were sold.

"Retained earnings" is:

Startup financing (e.g.,financing from business angels and venture capitalists)usually occurs during the development stage in a new venture's life cycle.

What is the survival revenues breakeven based on the following: Administrative expenses = $200,000; Marketing expenses = $180,000; Depreciation expenses = $100,000; and Interest expenses = $20,000; and a variable cost revenue ratio = .50?

Seed financing (e.g.,financing from the entrepreneur's assets,family,and friends)usually occurs during the development stage in a new venture's life cycle.

Introduction to Finance for Entrepreneurs

Developing the Business Idea

Organizing and Financing a New Venture

Evaluating Operating and Financial Performance

Managing Cash Flow

Types and Costs of Financial Capital

Securities Law Considerations When Obtaining Venture Financing

Projecting Financial Statements

Valuing Early-Stage Ventures

Venture Capital Valuation Methods

Professional Venture Capital

Other Financing Alternatives

Security Structures and Determining Enterprise Values

Harvesting the Business Venture Investment

Financially Troubled Ventures: Turnaround Opportunities

Filters