CEPA PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION

CEPA PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION 1) __% of owners have no written transition plan. - answer 79 2) __% have done no planning at all. - answer 48 3) __% have no written personal third act plan. - answer 94 4) __% of owners plan to transition over the next 10 years (representing ____ million Businesses and over $___ trillion in wealth). - answer 76%, 4.5 million, $10 trillion 5) ___ of business owners have no transition plan. - answer 49% 6) more than __% of businesses that are put on the market do not sell. - answer 70 7) only __% of family-owned Businesses transition to the second generation, and only __% survive to the third. - answer 30%, 12% 8) a successful exit strategy has three legs: - answer maximizes transferrable business value, ensures owner is financially prepared, and ensures there is a plan for "what next?" 9) 5 stages of the value maturity index - answer identify, protect, build, harvest, and manage value 10) the 4 c's - answer human, structural, customer, social 11) strategic value factors you control - answer predictable cash flow, clean balance sheet, size matters! 12) strategic value factors you control some of - answer private capital market conditions, terms/exit option, tangibles (value factors) 13) traditional accounting systems are setup to provided regular feedback on _____________________, yet your ________________________ 14) Are the direct drivers of business attractiveness. - answer tangible assets, intangible assets 15) value acceleration measures the value of your ________________________. - answer intangible assets 16) value acceleration is a proven process that focuses on value growth and aligning __________________, __________________, and __________________ goals. - answer business, personal, and financial 17) value acceleration is a proven process that focuses on ____________________ and aligning business, personal, and financial goals. - answer value growth 18) an exit plan asks and answers all the ________________, _______________, _______________, _______________, and ___________ questions involved in transitioning a privately owned business. - answer business, personal, financial, legal, and tax 19) exit planning combines the __________, ______________, _______________, and _______________ into a clear, simple strategy to build a business that is transferable through strong __________, ______________, _______________, and _______________ capital. - answer plan, concept, effort, and process, human, structural, customer, and social 20) ______________________ protects future you from present you; and, vise versa! - answer proper planning 21) where you will be 5 years from now is determined by ______________________________________ and ___________________________________. - answer the books you read and the people you associate with today. 22) the "quarterback" is the ____________________________________________. - answer personal financial planning team 23) ___% of business owners do not have a written financial plan. - answer 75 24) proper financial planning answers a huge question - what is the ___________________? - answer wealth gap 25) a first step in financial planning: gather the personal ______________________ data. - answer balance sheet 26) a _______________________ provides for the stability and continuity of a closely held business and is a crucial part of a business owner's overall succession and estate plan. - answer buy-sell agreement 27) triggering events may include: - answer death of an owner, disability of an owner, an offer by an outside party to purchase the owner's interest, termination of an owner's employment, divorce of an owner 28) there are many acceptable ways to execute investment plans post-exit. The key is to manage the ______________________ within a framework focused on ________________. - answer family expectations, goals. 29) families without advisors often decide to ___________________. - answer do nothing 30) the ______ is one of the greatest wealth building tools if used correctly. - answer irc 31) systems don't solve problems, ___________ do. - answer people 32) you don't have to choose between today and the future. Doing the right things today ensures ________________________________. - answer a successful exit in the future 33) when you consider your net worth, your business is the most significant line item on paper; in fact, according to most financial planners, it's like __ to __% of your net worth. - answer 80 to 90% 34) business value is not _____________. - answer liquid 35) the value acceleration methodology can increase your net worth by a factor of _____________. - answer five 36) there are approximately ______________ privately held businesses in the united states today. While most of those are holding companies with no payroll, roughly __________ are operating companies. - answer 28 million, six million 37) _________________________ businesses do $5 million or less in sales. - answer micro market 38) the ______________________________ is defined as businesses with sales between $5 million and $100 million - answer lower middle market 39) the __________________________________ has sales over $100 million. - answer upper middle market 40) baby boomers born between ______ and _________, nearly _____________ strong, own _______________ of privately held businesses. - answer 1946, 1964, 80 million, two-thirds 41) ___% of those who exit "profoundly regret" the decision within 12 months of exiting. - answer 75 42) owners don't really start thinking about transition and retirement until they reach around age ____ because their work has been one of the most significant parts of their life, if not the biggest. - answer 55 43) historical successful transition rates are between ____ and _____%. That means ______ to ______% of the possible wealth will not transfer. - answer 20%, 30%, 70%, 80% 44) __________________ of owners are not familiar with all exit options. - answer two-thirds 45) ______% have no plans in place to cover illness, death, or forced exit. - answer 40% 46) half of all owners need the company to remain profitable during and after the transition plan, yet _____% have not taken on a strategic review or a value enhancement project. - answer 86% 47) ____% felt they had a good idea of what their business is worth, yet only ____% have had a formal valuation in the last two years - answer 56%, 18% 48) a business owner has three roles: - answer management, family, and owner/investor 49) ___% of business owners have not completed any formal education related to transitioning their business. - answer 66% 50) most owners don't trust _______________________ to manage their assets. - answer third parties 51) if you did sell and put the money into a diversified, professionally managed portfolio, it would never _____________________________________________________. - answer produce the kind of income you produce in your business today. 52) exit planning is not a __________. Exit planning is ________________. - answer plan, dynamic 53) exit planning takes effort, but is not the ______________ itself. - answer effort 54) exit planning is easy to understand, but it will not necessarily be easy ___________________. - answer to accomplish 55) personal financial goals and personal aspirations should be driving the business, not ____________________________. - answer the other way around 56) value is the primary long-term goal, not _______________. - answer income 57) value acceleration is achieved by focusing on ______________________, which is based on the strength of your intellectual capital (your intangible assets). - answer the multiple 58) value acceleration is achieved by focusing on the multiple, which is based on the strength of your _______________________________. - answer intellectual capital (your intangible assets) 59) forecasting the private capital market is your ________________ strategy for harvesting your wealth. - answer worst 60) if master planning is the concept, ____________________________ is how you implement it. - answer value acceleration 61) if __________________________ is the concept, value acceleration is how you implement it. - answer master planning 62) the reason that 75% of owners profoundly regretted the decision to exit involved _________________ reasons, not _____________ reasons. - answer personal, financial 63) s.t.e.p. stands for: - answer spiritual, things, experiences, and people. 64) aligning _______________________, ______________________, and ________________________ objectives is a core principle on which the cepa program is built. - answer personal, financial, and business 65) to succeed today and in the future, you need to make sure that you are giving equal attention to ________________________________. - answer all three legs of the stool 66) the walk needs to begin by making sure you are in touch with your ________________ and your ____________________ . This personal purpose will identify what your ________________________ are today and in the future. - answer center and your personal purpose, personal financial needs 67) business ________________ is the primary long-term goal, not business ____________________. - answer value, income 68) most owners of lower to middle market businesses have ____________________ businesses. - answer lifestyle 69) ____________________ businesses usually generate a nice income for the owner, but focusing on income alone doesn't mean the business has __________________________. - answer lifestyle, transferable market value 70) this difference between the ____________________, multiplied by your ________________________, is the incremental value. - answer cost and benefit, ebitda multiple 71) there are five stages to creating a more valuable business: - answer identify, protect, build, harvest, and manage 72) ________________________ is always the first step and should never be skipped. It is completed in gate ______ of the value acceleration methodology. Understanding where your business benchmarks in the range of value sets the _________________ for everything going forward. - answer identifying value, one, baseline 73) ___ to ____% of your net worth is locked up in your business. - answer 80 to 90% 74) you should have your business professionally valued at least ____________. - answer annually 75) ________________________ is accomplished by creating and implementing prioritized de-risking action plans. - answer protecting value 76) ______________________ is the first step in building value. - answer protecting value 77) valuations are based in part on the ________ and _________________ from a buyer's point of view. - answer real and perceived risks 78) the five d's: - answer death, disability, divorce, distress, and disagreement 79) there is a ____% probability that you will be impacted by one of the five d's. - answer 50% 80) the difference between protecting and building is that, in the build stage, you _____________________________________, prioritizing more ____________________ to increase intangible capital over less strategic actions (a.k.a. De- risking). - answer take a longer-term point of view, strategic actions