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117) Unlike equity financing, debt financing does not require an

  117) Unlike equity financing, debt financing does not require an entrepreneur to dilute her ownership interest in the company. 118) After an entrepreneur invests his own money for startup, he or she will typically seek additional financing from friends and family next. 119) Unlike venture capital firms and most other institutional investors,.
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117) Unlike equity financing, debt financing does not require an
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69) According to one study, only 11 percent of small

  69) According to one study, only 11 percent of small business owners analyzed their financial statements as part of the managerial planning process, and another study found that one-third of all entrepreneurs run their companies without any kind of financial plan. 70) The balance sheet provides owners with an estimate of.
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69) According to one study, only 11 percent of small
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77) The most reliable method of determining an adequate minimum

  77) The most reliable method of determining an adequate minimum cash balance is using estimates of similar businesses from trade literature. 78) A small firm's minimum cash balance should be two times its average weekly sales. 79) A small company's ideal minimum cash balance is one month's sales. 80) Because the heart of.
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77) The most reliable method of determining an adequate minimum
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97) A small business owner should concentrate collection efforts the

  97) A small business owner should concentrate collection efforts on the top 20 percent of the company's customers since they typically account for 80 percent of all accounts receivable. 98) A security agreement is a contract in which a business selling an asset on credit gets a security interest in that.
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97) A small business owner should concentrate collection efforts the
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31) Which of the following combinations of ratios would indicate

  31) Which of the following combinations of ratios would indicate that a company is financially mismanaged and is not a good credit risk? A) High liquidity; high leverage B) Low liquidity; high leverage C) High liquidity; low leverage D) Low liquidity; low leverage 32) The ________ ratio measures the percentage of total assets financed by.
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31) Which of the following combinations of ratios would indicate
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107) Only about 20 percent of a typical business's inventory

  107) Only about 20 percent of a typical business's inventory turns over quickly. 108) Roughly 80 percent of the typical business' inventory turns over quickly. 109) It is much wiser to carry too little inventory rather than too much because there are no costs associated with carrying too little inventory. 110) Cash and.
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107) Only about 20 percent of a typical business's inventory
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Mini-Case 12-1:  The Golden Company This a summary of the monthly

  Mini-Case 12-1:  The Golden Company   This is a summary of the monthly cash budget for the next quarter (October through December) for the Golden Company.   OctoberNovember              December Sales$750,000$800,000$900,000 Manufacturing Costs450,000480,000540,000 Operating Expenses225,000240,000270,000 Capital Expenditures- 0 -60,000- 0 -   137) From the information provided, prepare a monthly cash budget for the next quarter (October-December) for the Golden Company. Dividends.
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Mini-Case 12-1:  The Golden Company This a summary of the monthly
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117) Many banks allow entrepreneurs to schedule their loan payments

  117) Many banks allow entrepreneurs to schedule their loan payments to fit their company's cash flow cycles. 118) Changing your firm's shipping terms from "F.O.B. buyer" to "F.O.B. seller" can improve your cash flow, as it switches the cost of shipping from you to your buyer. 119) Rather than build the current.
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117) Many banks allow entrepreneurs to schedule their loan payments
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41) In a Regulation D stock offering, the company: A) sells

  41) In a Regulation D stock offering, the company: A) sells its shares directly to private investors. B) makes a private placement without actually "going public." C) does not have to register its shares with the SEC. D) All of the above 42) To qualify for a Rule 147 (intrastate) public stock offering, a company.
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41) In a Regulation D stock offering, the company: A) sells
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81) Grants to small businesses made to strengthen the local

  81) Grants to small businesses made to strengthen the local economy in cities and towns that are considered economically distressed are made by: A) the Department of Housing and Urban Development. B) a local development company. C) U.S. Department of Agriculture's Rural Business Co-op services. D) the Economic Development Administration. 82) Malcolm wants to start.
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81) Grants to small businesses made to strengthen the local
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51) Port Royal's profit margin sales is: A) 5.2 percent. B) 32.5

  51) Port Royal's profit margin on sales is: A) 5.2 percent. B) 32.5 percent. C) 16.1 percent. D) 8.0 percent. 52) Port Royal's net profit-to-equity ratio is: A) 23.8 percent. B) 37.4 percent. C) 16.1 percent. D) 232.7 percent. 53) Ideally, a company reaches a point where increases in operating efficiency mean that expenses as a percentage of sales revenue.
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51) Port Royal's profit margin sales is: A) 5.2 percent. B) 32.5
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31) Once a small business has established a firm written

  31) Once a small business has established a firm written credit policy and has clearly communicated it, the next step in building an effective credit policy is to: A) send invoices promptly. B) determine what percentage of sales are being written off as bad debt. C) create a simple credit application. D) create a.
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31) Once a small business has established a firm written
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91) The maximum loan under the SBA's Community Express Program

  91) The maximum loan under the SBA's Community Express Program is ________ with an SBA guarantee of ________ percent and turnaround times on loan requests can be ________ . A) $250,000; 35; within 1 week B) $250,000; 85; within 5 business days C) $250,000; 85; within 36 hours D) $500,000; 85; within 36 hours 92).
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91) The maximum loan under the SBA's Community Express Program
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61) What the return net worth ratio for Meters, Inc.? A)

  61) What is the return on net worth ratio for Meters, Inc.? A) 8.5 percent B) 1.91:1 C) 21.8 percent D) 29.3 percent Regarding Gunther's Emporium, refer to the following to answer the questions below :   Gunther's Emporium expects net sales of $2,396,919 for the upcoming year, with variable expenses totaling $1,813,443 and fixed expenses of.
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61) What the return net worth ratio for Meters, Inc.? A)
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167) Asset-based loans an expensive method of financing because of

  167) Asset-based loans are an expensive method of financing because of the cost of originating and maintaining them and the higher risk involved. 168) If banks refuse to lend money to a startup business, the owner usually cannot convince his or her vendors and suppliers to extend trade credit either. 169) Vendors.
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167) Asset-based loans an expensive method of financing because of
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61) A company pledging its inventory, accounts receivables, or fixtures

  61) A company pledging its inventory, accounts receivables, or fixtures as collateral for a loan is using: A) floor planning. B) asset-based financing. C) trade credit. D) margin loan. 62) In discounted accounts receivable financing, a small business can typically borrow an amount equal to ________ percent of its receivables it pledges as collateral. A) 10.
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61) A company pledging its inventory, accounts receivables, or fixtures
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21) A technique that allows the small business owner to

  21) A technique that allows the small business owner to perform financial analysis by understanding the relationship between two accounting elements is called: A) creating the pro forma. B) budgeting. C) break-even analysis. D) ratio analysis. 22) Analyzing financial ratios could alert a business owner to which of these problems? A) Excessive inventory B) Overextending credit C) Too.
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21) A technique that allows the small business owner to
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87) To manage cash efficiently, business owners should strive to

  87) To manage cash efficiently, business owners should strive to accelerate their accounts payable and stretch out their accounts receivable. 88) A sale to a customer is not really a sale until the business owner actually collects the money from it. 89) Forty percent of industrial and wholesale sales are on credit,.
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87) To manage cash efficiently, business owners should strive to
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107) In startup companies, raising capital can easily consume as

  107) In startup companies, raising capital can easily consume as much as one-half of the entrepreneur's time and take many months to complete. 108) Rather than relying primarily on a single source of funds as they have in the past, entrepreneurs today must piece together their capital from multiple sources, a.
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107) In startup companies, raising capital can easily consume as
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51) Leasing allows business owners to forecast cash flows more

  51) Leasing allows business owners to forecast cash flows more ________ because lease payments are ________ amounts paid over a particular time period. A) often; fixed B) accurately; variable C) accurately; fixed D) often; variable 52) "Stick to what you are good at and ________ everything else" is an approach to reduce overhead costs. A) make B).
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51) Leasing allows business owners to forecast cash flows more
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11) Which of the following not a step in creating

  11) Which of the following is not a step in creating a cash budget? A) Determining an adequate minimum cash balance B) Forecasting profits C) Forecasting cash receipts D) Forecasting cash disbursements 12) On March 10th, a business owner receives an invoice from a supplier for $416.27 with "net 30" credit terms marked on it. .
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11) Which of the following not a step in creating
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1) Entrepreneurs needing between $100,000 and $3 million in the

  1) Entrepreneurs needing between $100,000 and $3 million in the current financial environment will likely find acquiring financing to be: A) challenging. B) confusing. C) attainable. D) easy. 2) Unlike entrepreneurs of the past, today's entrepreneurs: A) are finding more government interest and funding for business start-ups than in the past decade. B) find fewer closed doors.
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1) Entrepreneurs needing between $100,000 and $3 million in the
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101) Factors typically discount ________ percent of the face value

  101) Factors typically discount ________ percent of the face value of a company's accounts receivable. A) 5 - 40 B) 10 - 20 C) 60 - 95 D) 95 - 100 102) Selling the small company's accounts receivable outright to another business is called: A) collateral. B) factoring. C) trade credit. D) a line of credit. 103) Factoring: A) is a.
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101) Factors typically discount ________ percent of the face value
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80) Which of the following statements concerning store layout true? A)

  80) Which of the following statements concerning store layout is true? A) The farther an area is from the store's entrance, the greater its value. B) Most shoppers turn left upon entering a store and move around it in a clockwise fashion. C) Only about one-fourth of a store's customers will go more.
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80) Which of the following statements concerning store layout true? A)
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11) On a company's statement of cash flows, depreciation is: A)

  11) On a company's statement of cash flows, depreciation is: A) the difference between the total sources available to the owner and the total uses of those assets. B) listed as a source of funds because it is a noncash expense, already deducted as a cost of doing business. C) the owner's total.
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11) On a company's statement of cash flows, depreciation is: A)
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106) A variance a special exemption to a zoning ordinance. 107)

  106) A variance is a special exemption to a zoning ordinance. 107) For many entrepreneurs, quality of life is one of the key determinants of their choice of locale. 108) One element of the location decision common to all businesses is the need to locate where customers want to do business. 109) Few.
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106) A variance a special exemption to a zoning ordinance. 107)
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96) Proximity to needed raw materials critically important for a

  96) Proximity to needed raw materials is critically important for a service firm. 97) When analyzing the labor supply, a small business is concerned only with the level of education and training of the labor force in the area. 98) When choosing a location, a small business owner should match the characteristics.
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96) Proximity to needed raw materials critically important for a
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147) The goal of regulation S-B's simplified registration process to

  147) The goal of regulation S-B's simplified registration process is to make it easier for small companies to go public by cutting the paperwork and the costs of raising capital. 148) Making a public stock offering through the Small Company Offering Registration (SCOR) is easier and less expensive than a traditional.
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147) The goal of regulation S-B's simplified registration process to
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129) Why cash a unique asset?  What the advantages of

  129) Why is cash a unique asset?  What are the advantages of efficient cash management? 130) Your friend Jake owns a business that is achieving phenomenal growth.  Explain why it is said that: "Fast-growing companies are most likely to experience cash shortages." 131) The profits your small business is generating are high;.
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129) Why cash a unique asset?  What the advantages of
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1) The first phase of determining where to locate a

  1) The first phase of determining where to locate a business is: A) choosing a state in which the business owner wants to live. B) determining which city has the demographics that best fit the business. C) conducting a specific site analysis. D) determining which regions of the country are experiencing growth. 2) Entrepreneurs using.
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1) The first phase of determining where to locate a
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127) Foreign corporations invest in U.S. small businesses through strategic

  127) Foreign corporations invest in U.S. small businesses through strategic partnerships in order to gain access to new technology, new products, and U.S. markets. 128) A typical venture capital firm seeks investments in the $20,000 to $50,000 range and annual returns of 35-50 percent over three to five years. 129) Venture capital.
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127) Foreign corporations invest in U.S. small businesses through strategic
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41) A business that turns over its receivables 5.9 times

  41) A business that turns over its receivables 5.9 times a year would have an average collection period of about: A) 30 days. B) 2/10, net 30. C) 71 days. D) 62 days. 42) If the accounting period is one year with credit sales totaling $2,500,000 and accounts receivable totaling $200,000, what is the average.
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41) A business that turns over its receivables 5.9 times
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67) Profit the difference between a company's total revenue and

  67) Profit is the difference between a company's total revenue and its total expenses. 68) The goal of cash management is to maintain as much cash as possible on hand to meet any unexpected circumstances that might arise. 69) A cash budget allows a small business owner to anticipate cash shortages and.
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67) Profit the difference between a company's total revenue and
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157) Banks prefer to make loans to business start-ups because

  157) Banks prefer to make loans to business start-ups because although the risk level is higher, the potential returns are also much higher. 158) A line of credit is a form of financing employed by sellers of big-ticket items such as cars, boats, and furniture, which the retailers pledge as collateral.
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157) Banks prefer to make loans to business start-ups because
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1) Solid cash management enables a business owner to: A) adequately

  1) Solid cash management enables a business owner to: A) adequately meet the cash demands of the business. B) avoid retaining unnecessarily large cash balances. C) stretch the profit-generating power of each dollar the business owns. D) All of the above 2) ________ is the most important, yet least productive, asset that a small business.
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1) Solid cash management enables a business owner to: A) adequately
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Mini-Case 11-2:  Bowden Brake Service (Part B) One day while you

  Mini-Case 11-2:  Bowden Brake Service (Part B)   One day while you are in Bowden Brake Service getting your brakes repaired, Jim storms into his office, slamming doors and shouting about the local financial institutions. After a few minutes of building your courage, you approach Jim and ask him what the problem.
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Mini-Case 11-2:  Bowden Brake Service (Part B) One day while you
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Mini-Case 11-1:  Bowden Brake Service (Part A) Jim Bowden, owner of

  Mini-Case 11-1:  Bowden Brake Service (Part A)   Jim Bowden, owner of Bowden Brake Service, is planning to expand his six-year- old brake service to include tune-ups and tire services. Based on budget estimates for the upcoming year, Jim expects net sales to be $825,000 with a cost of goods sold of.
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Mini-Case 11-1:  Bowden Brake Service (Part A) Jim Bowden, owner of
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31) Typically, the entire process of going public takes ________,

  31) Typically, the entire process of going public takes ________, but it can take much longer if the issuing company is not properly prepared for the process. A) 30 days B) one year C) 60 to 180 days D) two weeks 32) The goal of the SEC's Regulation S-B is: A) to discourage small companies from.
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31) Typically, the entire process of going public takes ________,
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41) For product-based businesses, ________ often represents their largest capital

  41) For product-based businesses, ________ often represents their largest capital investment. A) account receivables B) inventory C) plant and equipment D) real estate 42) Which of the following is true about inventory management for the small business owner? A) Most small business owners have turned to technology and computer spreadsheets to achieve maximum efficiency in managing.
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41) For product-based businesses, ________ often represents their largest capital
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11) When looking for an angel, the key is: A) networking. B)

  11) When looking for an angel, the key is: A) networking. B) waiting until you need the money. C) looking across industries. D) using computer matches. 12) Angles are an excellent source of ________ money, often willing to wait ________ years or longer to cash out their investment. A) immediate; 5 B) patient: 7 C) long-term; 10 D) passive;.
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11) When looking for an angel, the key is: A) networking. B)
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86) The key to finding a suitable location identifying the

  86) The key to finding a suitable location is identifying the characteristics that can give a company a competitive edge and then searching out potential sites that meet those criteria. 87) By collecting a wealth of data on possible locations, entrepreneurs will find that the location decision is made for them. 88).
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86) The key to finding a suitable location identifying the
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21) Approximately ________ to ________ percent of all venture capital

  21) Approximately ________ to ________ percent of all venture capital invested comes from corporations. A) 1; 2 B) 2; 5 C) 6; 8 D) 8; 10 22) A(n) ________ is when a company raises capital by selling shares of its stock to the general public for the first time. A) venture capital offering B) partnership C) debt equity.
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21) Approximately ________ to ________ percent of all venture capital
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57) Cash the most important, yet least productive, asset a

  57) Cash is the most important, yet least productive, asset a small business owns. 58) A common cause of business failures is that owners neglect to forecast how much cash their companies will need until they reach the point of generating positive cash flow. 59) The objectives of cash management are to.
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57) Cash the most important, yet least productive, asset a
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