Exam 1: Introduction to Finance for Entrepreneurs

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

A venture's financial objective is to survive.

Perhaps the most important invention shuttling us from an industrial society to an information society is the computer chip.

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

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

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

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

Which one of the following would not be considered a type of venture financing?

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

One study of successful entrepreneurs indicated that a majority felt that the most important factor in the long-term success of their ventures was:

Lindsey and Tobias have the opportunity to invest in a project that requires an investment of $3,000.There is a 35% chance of a $2,900 return; a 40% chance of a $3,400 return; and a 25% chance of a $4,500 return one year from now.Lindsey requires a 15% return on the project after the first year,but Tobias requires a return of only 12%.Using the expected rate of return: