ENTREPRENEURIAL FINANCE 7TH EDITION
LEACH FINAL PAPER EXAM PREP
QUESTIONS AND ANSWERS GUARANTEED
TO PASS
◉ Determine the future value of a target venture which has net
income expected to be $40,000 at the end of four years from now. A
comparable firm currently has a stock price of $20.00 per shares;
100,000 shares outstanding; and net income of $50,000.
a. $1.0 million
b. $1.4 million
c. $1.6 million
d. $2.0 million
Answer: C
◉ The difference between a limited partnership and a general
partnership is that the limited partnership has partners who actively
manage the day-to-day operations but also has passive investors.
Answer: T
,◉ A limited partnership limits certain partners' liabilities to pay the
venture's obligations to the amount each paid for their partnership
interests.
Answer: T
◉ In a corporate legal entity, the personal assets of the owners are
separate from the business' assets, but the personal liabilities of the
owners are not.
Answer: F
◉ Limited liability in the corporate business structure means
creditors can seize only some of the corporation's assets.
Answer: F
◉ The articles of incorporation are the basic legal declarations
contained in the corporate charter.
Answer: T
◉ Limited liability companies (LLCs) are owned by shareholders
with limited liability and its earnings are taxed at the corporate rate.
Answer: F
, ◉ Partnerships are treated with pass-through taxation. This means
that profits and losses of the business pass directly through to
investors on the basis specified in the partnership agreement.
Answer: T
◉ An employment contract is an agreement between an employer
and employee about the terms and conditions of employment
including the employee's agreement to keep confidential
information secret and to assign ideas and inventions to the
employer.
Answer: T
◉ Nondisclosure agreements prohibit the creator of an idea or other
form of intellectual property from sharing it with others once it has
been presented the first time.
Answer: F
◉ Financial bootstrapping maximizes the need for financial capital.
Answer: F
◉ . The income received by a proprietorship is taxed at personal tax
rates.
Answer: T
LEACH FINAL PAPER EXAM PREP
QUESTIONS AND ANSWERS GUARANTEED
TO PASS
◉ Determine the future value of a target venture which has net
income expected to be $40,000 at the end of four years from now. A
comparable firm currently has a stock price of $20.00 per shares;
100,000 shares outstanding; and net income of $50,000.
a. $1.0 million
b. $1.4 million
c. $1.6 million
d. $2.0 million
Answer: C
◉ The difference between a limited partnership and a general
partnership is that the limited partnership has partners who actively
manage the day-to-day operations but also has passive investors.
Answer: T
,◉ A limited partnership limits certain partners' liabilities to pay the
venture's obligations to the amount each paid for their partnership
interests.
Answer: T
◉ In a corporate legal entity, the personal assets of the owners are
separate from the business' assets, but the personal liabilities of the
owners are not.
Answer: F
◉ Limited liability in the corporate business structure means
creditors can seize only some of the corporation's assets.
Answer: F
◉ The articles of incorporation are the basic legal declarations
contained in the corporate charter.
Answer: T
◉ Limited liability companies (LLCs) are owned by shareholders
with limited liability and its earnings are taxed at the corporate rate.
Answer: F
, ◉ Partnerships are treated with pass-through taxation. This means
that profits and losses of the business pass directly through to
investors on the basis specified in the partnership agreement.
Answer: T
◉ An employment contract is an agreement between an employer
and employee about the terms and conditions of employment
including the employee's agreement to keep confidential
information secret and to assign ideas and inventions to the
employer.
Answer: T
◉ Nondisclosure agreements prohibit the creator of an idea or other
form of intellectual property from sharing it with others once it has
been presented the first time.
Answer: F
◉ Financial bootstrapping maximizes the need for financial capital.
Answer: F
◉ . The income received by a proprietorship is taxed at personal tax
rates.
Answer: T
