MGNT 3500 Test Questions and
Complete Solutions Graded A+
Most successful entrepreneurs found that starting their business _______.
A) Took more time but was much easier than they anticipated
B) Took more time than they anticipated
C) Took more time and cost more than they anticipated
D) Was much easier than expected
E) Cost more than they had anticipated - Answer: C) Took more time and cost more than they
anticipated
Pricing your product too low _______.
A) Makes customers believe they are getting a bargain
B) Is a good strategy for start-up business
C) Is better than pricing your product too high
D) Increases traffic into your business
E) May actually keep customers from purchasing your product - Answer: E) May actually keep customers
from purchasing your product
When estimating sales for the first year of a new business, it is important to _______.
A) Use your own numbers rather than competitors or industry numbers
B) Only do a few months of sales projections
C) Consider salary requirements
D) Do market research and analysis
E) Double your estimate for goods sold on the Internet - Answer: D) Do market research and analysis
,An income statement tells you when you're going to _______.
A) Need to borrow money
B) All of these
C) Make a profit on paper
D) Have enough cash to pay the bills
E) Have money to spend - Answer: C) Make a profit on paper
Which of the following statements is true?
A) Working capital is essential for survival
B) Working capital is the money set asside to invest and 'put to work' for you
C) Growth provides significant cash for a business
D) Profits are synonymous with cash flow
E) Business to business sales generate cash quickly - Answer: A) Working capital is essential for survival
A break-even analysis ________
A) Is the best financial tool for predicting cash flow
B) All of these
C) Is only useful when launching a new product or service
D) Tells you when you will start making money
E) Tells you when you will need to borrow cash - Answer: D) Tells you when you will start making money
Which of the following statements is true?
A) Bootstrapping is using one's own resources to support business
B) Estimating income for the first year of a new business is generally the easiest part of preparing
financials.
, C) What-if projections only need to consider the worst-case scenario for the business.
D) Start-up costs for retail businesses are generally minor costs.
E) Many businesses fail in the first year to do an excess of working capital. - Answer: A) Bootstrapping is
using one's own resources to support business
Which of the following statements is false?
A) Seasonality is an issue for most businesses.
B) A start-up should ask the customer to pay up front if possible.
C) Entrepreneurs should avoid financial advice as it often does not apply to specialty businesses.
D) When planning financing for your business you need to consider things you cannot see.
E) It is a generally a good idea for start-ups to lease equipment instead of buying, - Answer: C)
Entrepreneurs should avoid financial advice as it often does not apply to specialty businesses.
Most start-up companies today are funded by ______.
A) SBA loans
B) the entrepreneur's own money
C) angel funders
D) commercial banks
E) institutional lenders - Answer: B) the entrepreneur's own money
Your textbook talked about the "four C's" of credit. Which of these is NOT one of the four C's?
A) Collateral
B) Cost
C) Capacity
D) Capital
E) Character - Answer: B) Cost
Complete Solutions Graded A+
Most successful entrepreneurs found that starting their business _______.
A) Took more time but was much easier than they anticipated
B) Took more time than they anticipated
C) Took more time and cost more than they anticipated
D) Was much easier than expected
E) Cost more than they had anticipated - Answer: C) Took more time and cost more than they
anticipated
Pricing your product too low _______.
A) Makes customers believe they are getting a bargain
B) Is a good strategy for start-up business
C) Is better than pricing your product too high
D) Increases traffic into your business
E) May actually keep customers from purchasing your product - Answer: E) May actually keep customers
from purchasing your product
When estimating sales for the first year of a new business, it is important to _______.
A) Use your own numbers rather than competitors or industry numbers
B) Only do a few months of sales projections
C) Consider salary requirements
D) Do market research and analysis
E) Double your estimate for goods sold on the Internet - Answer: D) Do market research and analysis
,An income statement tells you when you're going to _______.
A) Need to borrow money
B) All of these
C) Make a profit on paper
D) Have enough cash to pay the bills
E) Have money to spend - Answer: C) Make a profit on paper
Which of the following statements is true?
A) Working capital is essential for survival
B) Working capital is the money set asside to invest and 'put to work' for you
C) Growth provides significant cash for a business
D) Profits are synonymous with cash flow
E) Business to business sales generate cash quickly - Answer: A) Working capital is essential for survival
A break-even analysis ________
A) Is the best financial tool for predicting cash flow
B) All of these
C) Is only useful when launching a new product or service
D) Tells you when you will start making money
E) Tells you when you will need to borrow cash - Answer: D) Tells you when you will start making money
Which of the following statements is true?
A) Bootstrapping is using one's own resources to support business
B) Estimating income for the first year of a new business is generally the easiest part of preparing
financials.
, C) What-if projections only need to consider the worst-case scenario for the business.
D) Start-up costs for retail businesses are generally minor costs.
E) Many businesses fail in the first year to do an excess of working capital. - Answer: A) Bootstrapping is
using one's own resources to support business
Which of the following statements is false?
A) Seasonality is an issue for most businesses.
B) A start-up should ask the customer to pay up front if possible.
C) Entrepreneurs should avoid financial advice as it often does not apply to specialty businesses.
D) When planning financing for your business you need to consider things you cannot see.
E) It is a generally a good idea for start-ups to lease equipment instead of buying, - Answer: C)
Entrepreneurs should avoid financial advice as it often does not apply to specialty businesses.
Most start-up companies today are funded by ______.
A) SBA loans
B) the entrepreneur's own money
C) angel funders
D) commercial banks
E) institutional lenders - Answer: B) the entrepreneur's own money
Your textbook talked about the "four C's" of credit. Which of these is NOT one of the four C's?
A) Collateral
B) Cost
C) Capacity
D) Capital
E) Character - Answer: B) Cost
