Entrepreneurship: Building a Business

Chapter 19: Financing Your Business

Chapter Practice Tests

1
_______________involves operating as frugally as possible.
A)Management
B)Bootstrapping
C)Screening
D)Financing
2
An agent who handles an entrepreneur's accounts receivable for a fee is called a/an______________.
A)factor
B)accountant
C)resource
D)intermediary
3
_____________is ownership in a business.
A)Capital
B)Investment
C)Venture
D)Equity
4
The number one source of start-up capital is________________.
A)family and friends
B)venture capitalists
C)personal savings
D)private investors
5
A/An____________is an investor who funds start-up companies.
A)financial advisor
B)angel
C)venture capitalist
D)private investor
6
_____________is the money raised by taking out loans.
A)Debt capital
B)Risk capital
C)Long-term financing
D)Operating capital
7
A/An_____________is an arrangement whereby a lender agrees to lend up to a specific amount of money at a certain rate for a specific period of time.
A)trade credit
B)loan proposal
C)line of credit
D)short-term loan
8
Small Business Investment Companies (SBICs) are privately managed__________companies.
A)venture capital
B)minority enterprise
C)commercial finance
D)state-sponsored
9
____________refers to proposed or estimated financial statements to include in your business plan.
A)Cash flow
B)Operating capital
C)Collateral
D)Pro forma
10
Circumstances at the time of a loan request are known as___________.
A)productivity
B)conditions
C)collateral
D)character
11
___________companies expect returns of between 30 and 70 percent depending on the stage of the business.
A)Venture capital
B)Investment banking
C)commercial finance
D)SBICs
12
The investigation and analysis a prudent investor does before making a business decision is called_______________.
A)screening
B)research
C)quality control
D)due diligence
13
A/An_____________is the sale of stock in a company on a public stock exchange.
A)private placement
B)initial public offering (IPO)
C)security
D)investment
14
______________is the amount of cash needed to carry out daily business operations.
A)Working capital
B)Venture capital
C)Start-up funds
D)Collateral
15
_________________are extra amounts of money that is saved for absolute necessities.
A)Working capital
B)Capital funds
C)Contingency funds
D)Operating capital
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