Question 1

Using outside equity in your business

Accepted Answer

A)  will increase your own exposure to financial loss.
B)  will protect it from increased costs in the form of interest.
C)  is inexpensive.
D)  solves problems of control and decision-making.

Question 2

Which of these represent the number one source for small business financing?

Accepted Answer

A)  Owners
B)  Angel investors
C)  Government programs
D)  Banks

Question 3

Personal credit cards provide _____ financing in the _____ phase of business.

Accepted Answer

A)  equity;financing for start-up
B)  debt;financing for growth
C)  gift;financing for exit
D)  equity;financing for operations

Question 4

A legal "artificial" entity that is formed by filing specific documents with a state government is called a

Accepted Answer

A)  sole proprietorship.
B)  partnership.
C)  corporation.
D)  general partnership.

Question 5

Which of these is the least available funding source for new firms?

Accepted Answer

A)  Loans from family and friends
B)  Owner capital
C)  External loans from commercial-rate lenders
D)  External loans from motivated lenders

Question 6

Which of these sources of equity financing is available during all four phases of business?

Accepted Answer

A)  Angel investors
B)  Friends and family
C)  Venture capital
D)  Self generated funds

Question 7

During the start-up phase of a small business the "3-F investors" are all of these EXCEPT

Accepted Answer

A)  friends.
B)  family.
C)  fools.
D)  foundations.

Question 8

Angel investors generally provide financing during the operations phase of business.

Accepted Answer

A) True 
 B)False

Question 9

In business and in law,responsibility is called

Accepted Answer

A)  assets.
B)  liability.
C)  equity.
D)  value system.

Question 10

The most common source of capital for established ongoing small businesses is borrowed funds.

Accepted Answer

A) True 
 B)False

Question 11

The ratio of debt to equity that provides the maximum level of profits is called the

Accepted Answer

A)  cost of capital.
B)  declining financial leverage position.
C)  optimum capital structure.
D)  WAC.

Question 12

Any valuable asset that is donated to your business without any obligation to repay or to give any ownership interest is called

Accepted Answer

A)  debt.
B)  equity capital.
C)  a gift.
D)  a tax credit. C

Question 13

A legal obligation to pay money in the future is called equity capital.

Accepted Answer

A) True 
 B)False

Question 14

What are the different types of institutional gifts? Explain how a business can benefit from them.

Accepted Answer

Tax abatements,tax credits,and grants ar...

Question 15

There are four primary CRAs: Equifax,Experian,Trans Union,and E-Trade.

Accepted Answer

A) True 
 B)False

Question 16

Reduced taxes is the most common form of institutional gift financing.

Accepted Answer

A) True 
 B)False

Question 17

Which of these provide debt financing during the start-up phase of business?

Accepted Answer

A)  Angel investors
B)  Factor receivables
C)  Public stock offerings
D)  Incubators

Question 18

The information collected and reported by the CRA does NOT include which of these areas?

Accepted Answer

A)  Personal health history information
B)  Identifying information
C)  Credit information
D)  Public record information A

Question 19

When you sell part of your business,the money you receive is

Accepted Answer

A)  debt.
B)  equity capital.
C)  gift.
D)  tax credit.

Question 20

Goodwill can be used as collateral.

Accepted Answer

A) True 
 B)False  False

Exam 15: Small Business Finance: Using Equity,debt,and Gifts

Using outside equity in your business

Correct AnswerverifiedShow Answer

Which of these represent the number one source for small business financing?

Correct AnswerverifiedShow Answer

Personal credit cards provide _____ financing in the _____ phase of business.

Correct AnswerverifiedShow Answer

A legal "artificial" entity that is formed by filing specific documents with a state government is called a

Correct AnswerverifiedShow Answer

Which of these is the least available funding source for new firms?

Correct AnswerverifiedShow Answer

Which of these sources of equity financing is available during all four phases of business?

Correct AnswerverifiedShow Answer

During the start-up phase of a small business the "3-F investors" are all of these EXCEPT

Correct AnswerverifiedShow Answer

Angel investors generally provide financing during the operations phase of business.

Correct AnswerverifiedShow Answer

In business and in law,responsibility is called

Correct AnswerverifiedShow Answer

The most common source of capital for established ongoing small businesses is borrowed funds.

Correct AnswerverifiedShow Answer

The ratio of debt to equity that provides the maximum level of profits is called the

Correct AnswerverifiedShow Answer

Any valuable asset that is donated to your business without any obligation to repay or to give any ownership interest is called

Correct AnswerverifiedC

A legal obligation to pay money in the future is called equity capital.

Correct AnswerverifiedShow Answer

What are the different types of institutional gifts? Explain how a business can benefit from them.

Correct AnswerverifiedTax abatements,tax credits,and grants ar...View AnswerShow Answer

There are four primary CRAs: Equifax,Experian,Trans Union,and E-Trade.

Correct AnswerverifiedShow Answer

Reduced taxes is the most common form of institutional gift financing.

Correct AnswerverifiedShow Answer

Which of these provide debt financing during the start-up phase of business?

Correct AnswerverifiedShow Answer

The information collected and reported by the CRA does NOT include which of these areas?

Correct AnswerverifiedA

When you sell part of your business,the money you receive is

Correct AnswerverifiedShow Answer

Goodwill can be used as collateral.

Correct AnswerverifiedFalse

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Personal credit cards provide _ financing in the _ phase of business.

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C

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Tax abatements,tax credits,and grants ar...
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A

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False