ENTREPRENEURIAL FINANCE FINAL PAPER
SOLVED QUESTIONS WITH COMPLETE
ANSWERS
◉ Entrepreneurial Process.
Answer: developing opportunities, gathering resources, and
managing and building operations with the goal of creating value
◉ Entrepreneurship.
Answer: process of changing ideas into commercial opportunities
and creating value
◉ Entrepreneur.
Answer: individual who thinks, reasons, and acts to convert ideas
into commercial opportunities and to create value
◉ Entrepreneurial Opportunities.
Answer: ideas with potential to create value through different or
new, repackaged, or repositioned products, markets, processes, or
services.
◉ E-Commerce.
,Answer: the use of electronic means to conduct business online
◉ 7 Principles of Entrepreneurial Finance.
Answer: 1. Real, human, and financial capital must be rented from
owners.
2. Risk and Expected reward go hand in hand.
3. While accounting is the language of business, cash is the currency.
4. New venture financing involves search ,negotiation and privacy.
5. A venture's financial objective is to increase value.
6. It is dangerous to assume that people act against their own self-
interests.
7. Venture character and reputation can be assets or liabilities.
◉ Public Financial Markets.
Answer: where standardized contracts or securities are traded on
organized securities exchanges
◉ Private Financial Markets.
Answer: where customized contracts or securities are negotiated,
created, and held with restrictions on how they can be transferred.
◉ Free Cash.
, Answer: cash exceeding that which is needed to operate, pay
creditors, and invest in assets
◉ Free Cash Flow.
Answer: change in free cash over time
◉ Owner-manger (agency) conflicts.
Answer: differences between manger's self-interest and that of the
owners who hired him
◉ Owner-debt holder conflict.
Answer: divergence of the owners' and lenders' self-interests as the
firm gets close to bankruptcy
◉ Entrepreneurial finance.
Answer: application and adaptation of financial tools and techniques
to the planning, funding, operations, and valuation of an
entrepreneurial venture.
◉ Financial Distress.
Answer: when cash flow is insufficient to meet current debt
obligations
SOLVED QUESTIONS WITH COMPLETE
ANSWERS
◉ Entrepreneurial Process.
Answer: developing opportunities, gathering resources, and
managing and building operations with the goal of creating value
◉ Entrepreneurship.
Answer: process of changing ideas into commercial opportunities
and creating value
◉ Entrepreneur.
Answer: individual who thinks, reasons, and acts to convert ideas
into commercial opportunities and to create value
◉ Entrepreneurial Opportunities.
Answer: ideas with potential to create value through different or
new, repackaged, or repositioned products, markets, processes, or
services.
◉ E-Commerce.
,Answer: the use of electronic means to conduct business online
◉ 7 Principles of Entrepreneurial Finance.
Answer: 1. Real, human, and financial capital must be rented from
owners.
2. Risk and Expected reward go hand in hand.
3. While accounting is the language of business, cash is the currency.
4. New venture financing involves search ,negotiation and privacy.
5. A venture's financial objective is to increase value.
6. It is dangerous to assume that people act against their own self-
interests.
7. Venture character and reputation can be assets or liabilities.
◉ Public Financial Markets.
Answer: where standardized contracts or securities are traded on
organized securities exchanges
◉ Private Financial Markets.
Answer: where customized contracts or securities are negotiated,
created, and held with restrictions on how they can be transferred.
◉ Free Cash.
, Answer: cash exceeding that which is needed to operate, pay
creditors, and invest in assets
◉ Free Cash Flow.
Answer: change in free cash over time
◉ Owner-manger (agency) conflicts.
Answer: differences between manger's self-interest and that of the
owners who hired him
◉ Owner-debt holder conflict.
Answer: divergence of the owners' and lenders' self-interests as the
firm gets close to bankruptcy
◉ Entrepreneurial finance.
Answer: application and adaptation of financial tools and techniques
to the planning, funding, operations, and valuation of an
entrepreneurial venture.
◉ Financial Distress.
Answer: when cash flow is insufficient to meet current debt
obligations
