HSU ENT 3060 Exam 2
Which of the following is true?
"International entrepreneurship is the discovery, enactment, evaluation, and exploitation of opportunities—across national borders—to create future goods and services." (Oviatt & McDougall, 2005)
An entrepreneur wants to find out hoe many units she should sell in order to break even. The selling price of her product is $5. She estimates that the variable costs are $3 per unit and annual fixed costs are $100,000. How many units should she sell?
(Fixed Costs)/(Price-COGS)= (100,000)/(5-3)=50,000
Which of the following items is typically not included in a concept statement?
A description of how much money the new venture needs.
Continue above. You decide to invest $1M, what is the most reasonable percentage 0f ownership, based on book value, you should get?
ABV=$1.5M - $2M Post money= $2.5M-3M Percentage= 40%-30% Answer: 35%
Imagine you were an investor. The venture has $2M shareholder equity, $.5 M total liabilities. The balance sheet records $.3M patents and $.2M good will and nothing else under intangible assets. What is book value?
Asserts-Intangible-liability=Book Value ($2M+.5M)-.5M-.5M=$1.5M
_______ are individuals who invest their personal capital directly in start-ups
Business angels
Most founders' agreement include a ______ clause, which legally obligates the departing founder to sell to the remaining founders his or her interest in the firm if the remaining founders are interested.
Buyback
Which of the following forms have a disadvantage of "double taxation"?
C Corporation
The three primary reasons startups need funding are _______
Cash flow challenges, capital investments, and lengthy product development cycles
A(n)______ involves showing a preliminary description of a product or service idea to prospective customers to gauge customer interest, desirability and purchase intent.
Concept test
Using above values your company
Does none of the above.
What is googles motto?
Don't be Evil
An important part of obtaining venture capital funding is going through ______ diligence, which refers to the process of investigating the merits of a potential venture and verifying the key claims made by the business plan.
Due
A brief, carefully constructed statement that outlines the merits of a business opportunity is called a(n) _____ speech.
Elevator
A situation that involves doing something that is beneficial to oneself or the organization, but may be unethical, is called a(n)_______.
Ethical Dilemma
Equity financing (or funding) means ______.
Exchanging partial ownership of the firm, usually in the form of stock, for funding
_______ is the process of determining whether a business idea is viable
Feasibility Analysis
According to the textbook, beyond their own funds, the second source of funds for many new ventures is _______
Friends and Family
Debt financing involves _________
Getting a loan or selling corporate bonds
"Don't Be evil" is the corporate motto for _____.
Google.
Which of the following is not a source of equity funding?
Government Grants
A high D/E ratio (larger than 1) means the company
Have less equity than liabilities
Which of the following statements is true?
IPO requires lots of money paid to underwriters
Which of the following are true
Immigrant entrepreneurship is a type of international entrepreneurship.
Which of the following is not an attribute of an attractive industry?
Is late rather than early in its life cycle
Which of the following is the best form for an entrepreneur who wants 100% ownership, avoids double taxation, and wants limited liability?
LLC
Venture capital firms are _____ of money managers who raise money in "funds" to invest in startups and growing firms.
Limited Partnerships
Which of the following is NOT true?
Many Chinese young people used google to find pirated MP3' s.
Which of the following is typically not included in the founders' agreement for a firm?
Marketing Plan
What word was NOT banned on google.cn in 2006?
Ni Hao
Which of the following about intellectual property is correct?
None of the above
Which of the following about partnerships is correct?
None of the above
Which of the following is true?
None of the above.
If you want to start a business in a foreign country, it is advised that you live in the target country for at least ______;
One year
Which of the following statements is NOT true?
Other things being equal, debt financing, compared to equity financing, can increase the company's ROA.
Talking to industry experts, obtaining feedback from prospective customers, and administering surveys are examples _____ research
Primary Research
The two components of product/service feasibility analysis are _____ and ______.
Product/service desirability; product/service demand
Use above values. Company's profit margin?
Profit Margin= (Net income)/(Net Sales) PM=($2M)/($6M)=33%
The four main financial objectives of a firm are ______.
Profitability, liquidity, efficiency and stability
Revenue=$6M Net Income=$2M Assets=$8M Shareholder Equity= $4M Company's ROA?
ROA=(Net income)/(assets) ROA=($2M)/($8M)=25%
If you want to find how much profit a firm generates with every dollar shareholders have invested, you need to calculate
ROE
Use above values. Company's ROE?
ROE=(Net income)/(Total Equity) ROE=($2M)/($4M)=50%
According to the textbook, the most practical way to interpret or make sense of a firm's historical financial statements is through ______.
Ratio Analysis
Which of the following is NOT true?
Social entrepreneurship firms must register as non-profit organization
Which form of organizations has the minimum legal requirements but low liquidity?
Sole proprietorship
The strength and vigor of a firm's overall financial posture is referred to as a _______.
Stability
A subchapter S corporation can be distinguished from other types of corporations in:
Tax status
Which of the following is NOT true?
The Chinese government gives internet firms an official backlist of sited and words that these firms have to censor. (Page 6 Article)
A potential problem of the market-comparable valuation is:
The difficulty to find a comparable, public company (********Unsure if correct answer)
The difference between entrepreneurship and social entrepreneurship can be ascribed to _________
The entrepreneurs motivation
Copyright law protects any work of authorship
The moment is assumes a tangible form
According to the textbook, two of the most important factors to consider regarding "management prowess" are _______.
The passion the sole entrepreneur or the management team has for the business idea and the extent to which the management team or sole entrepreneur understands the market in which the firm will participate
Which of the following about patents is correct?
The shape of the Coca-Cola's bottle could be an example of design patent.
A _____ is any formula, pattern, physical device, idea, process, or other information that provides the owner of the information with a competitive advantage in the marketplace
Trade Secret
A company's customer list is most commonly protected under ______ regulation
Trade Secret
The four types of trademarks are ________.
Trademarks, service marks, collective marks and certification marks
Gross profit margin Can be calculates as ___________.
[Net income/total revenues]*100%
_______ is a company's ability to meet its short-term financial obligations.
liquidity
