ENTR460 Midterm Exam Study
Guide
The primary goal of the entrepreneurial process is to: - Answer Create value
The entrepreneurial process includes: - Answer Developing opportunities, gathering
resources, managing and building operations.
An entrprenuer is an individual who thinks, reasons and acts to: - Answer Convert ideas
into commercial opportunities to create value.
According to Bureau of Labor Statistics data, approx. 90% of new employer businesses
survive after two years and two thirds survive after 5 years. (T or F) - Answer FALSE
Which of the following is a megatrend source of entrepreneurial opportunities? - Answer
Societal changes
One example of a major societal change is the gig economy: (T or F) - Answer TRUE
One example of a demographic trend or change that has created entrepreneurial
opportunities is - Answer Boomers needing more health care
One example of a technological megatrend creating entrepreneurial opportunities is -
Answer E-commerce
Rapid growth in Brazil's emerging economy is an example of which megatrend
opportunity? - Answer Emerging economies and global change
One example of entreprenuerial opportunities arising from the subprime mortgate crisis
is - Answer Financial institution consolidation
An example of a disruptive innovation is - Answer Airbnb
Which is NOT considered a principle of entrepreneurial finance: - Answer A venture's
financial objective is to increase sales
Cash burn measures the gap between the cash begin spent and that collected from
sales. (T or F) - Answer True
Early-stage ventures typically operate in each of the following stages except: - Answer
Rapid-growth
Which type of financing is typically utilized for the venture development life cycle? -
Answer Seed financing
Which is a major source of funds for the venture development life cycle stage? - Answer
Entrepreneur's assets
, Which type of financing is typically utilized for the venture startup life cycle stage? -
Answer Startup financing
Which type if financing is typically considered for the venture survival life cycle stage -
Answer First-round financing
Commercial banks and gov. assistance programs are sources of first-round financing:
(T or F) - Answer TRUE
Venture capital is late-stage financial capital that often involves a substantial risk of
total loss. (T or F) - Answer FALSE
What types of businesses may an entrepreneur may start ? - Answer Entrepreneurial
ventures, salary-replacement and lifestyle firms
Entrepreneurial ventures can typically grow at a targeted rate w/o external investments.
(T or F) - Answer FALSE
Salary-replacement firms and lifestyle firms may transition from business idea to
business plan more quickly than those entrepreneurial ventures requiring significant
external financing. (T or F) - Answer TRUE
What are three characteristics that are associated with a sound business model? -
Answer 1) Generates revenues, 2) makes profits, 3) produces free cash flows.
It is common for ventures that are first to market or generate defensible intellectual
property to initially price new products or services at high markups. (T or F) - Answer
TRUE
A sound business model is not required to generate after-tax operating profits. (T or F) -
Answer FALSE
Free cash flows refer to a venture's - Answer Cash inflows exceeding cash outflows
Free cash flows can be used for - Answer Expanding operations, restructuring
long-term debt, and paying distribution to the venture's equity owners.
The venture's value to its owners is determined by the size and timing of its future free
cash flows (to equity). (T or F) - Answer TRUE
The opportunity costs associated with the business owners having to wait to receive
free cash flows flows in the future is known as: - Answer The time value of money
Time-to-market, particularly when the venture is first to market, always guarantees
consumer adoption and long-term success. (T or F) - Answer FALSE
The strengths and weaknesses in the "SWOT" business feasibility focuses on: - Answer
Internal aspects
The possibility if future federal regulatory changes use an example of a potential SWOT
Guide
The primary goal of the entrepreneurial process is to: - Answer Create value
The entrepreneurial process includes: - Answer Developing opportunities, gathering
resources, managing and building operations.
An entrprenuer is an individual who thinks, reasons and acts to: - Answer Convert ideas
into commercial opportunities to create value.
According to Bureau of Labor Statistics data, approx. 90% of new employer businesses
survive after two years and two thirds survive after 5 years. (T or F) - Answer FALSE
Which of the following is a megatrend source of entrepreneurial opportunities? - Answer
Societal changes
One example of a major societal change is the gig economy: (T or F) - Answer TRUE
One example of a demographic trend or change that has created entrepreneurial
opportunities is - Answer Boomers needing more health care
One example of a technological megatrend creating entrepreneurial opportunities is -
Answer E-commerce
Rapid growth in Brazil's emerging economy is an example of which megatrend
opportunity? - Answer Emerging economies and global change
One example of entreprenuerial opportunities arising from the subprime mortgate crisis
is - Answer Financial institution consolidation
An example of a disruptive innovation is - Answer Airbnb
Which is NOT considered a principle of entrepreneurial finance: - Answer A venture's
financial objective is to increase sales
Cash burn measures the gap between the cash begin spent and that collected from
sales. (T or F) - Answer True
Early-stage ventures typically operate in each of the following stages except: - Answer
Rapid-growth
Which type of financing is typically utilized for the venture development life cycle? -
Answer Seed financing
Which is a major source of funds for the venture development life cycle stage? - Answer
Entrepreneur's assets
, Which type of financing is typically utilized for the venture startup life cycle stage? -
Answer Startup financing
Which type if financing is typically considered for the venture survival life cycle stage -
Answer First-round financing
Commercial banks and gov. assistance programs are sources of first-round financing:
(T or F) - Answer TRUE
Venture capital is late-stage financial capital that often involves a substantial risk of
total loss. (T or F) - Answer FALSE
What types of businesses may an entrepreneur may start ? - Answer Entrepreneurial
ventures, salary-replacement and lifestyle firms
Entrepreneurial ventures can typically grow at a targeted rate w/o external investments.
(T or F) - Answer FALSE
Salary-replacement firms and lifestyle firms may transition from business idea to
business plan more quickly than those entrepreneurial ventures requiring significant
external financing. (T or F) - Answer TRUE
What are three characteristics that are associated with a sound business model? -
Answer 1) Generates revenues, 2) makes profits, 3) produces free cash flows.
It is common for ventures that are first to market or generate defensible intellectual
property to initially price new products or services at high markups. (T or F) - Answer
TRUE
A sound business model is not required to generate after-tax operating profits. (T or F) -
Answer FALSE
Free cash flows refer to a venture's - Answer Cash inflows exceeding cash outflows
Free cash flows can be used for - Answer Expanding operations, restructuring
long-term debt, and paying distribution to the venture's equity owners.
The venture's value to its owners is determined by the size and timing of its future free
cash flows (to equity). (T or F) - Answer TRUE
The opportunity costs associated with the business owners having to wait to receive
free cash flows flows in the future is known as: - Answer The time value of money
Time-to-market, particularly when the venture is first to market, always guarantees
consumer adoption and long-term success. (T or F) - Answer FALSE
The strengths and weaknesses in the "SWOT" business feasibility focuses on: - Answer
Internal aspects
The possibility if future federal regulatory changes use an example of a potential SWOT
