entr ch 14 pt 1

_____ refers to the value of a business that exceeds the sum of the value of all individual assets but that cannot be sold separately from the business.

Goodwill

_____ is money from selling part of a business to people who are not and will not be involved in the management of the business.

Outside equity

Orion Inc. was started as a small organization with five employees. After the first year's profits were made, the owners decided to invest the profits in expanding the business. This is an example of financing the business using _____.

bootstrapping

Money contributed to businesses in return for part ownership of the business is called a(n) _____.

equity capital

A legal obligation to pay money in the future is called equity capital.

false

In the U.S., government programs are the number one source for financing small businesses.

false

Knowing one's personal worth is not important when starting a business.

false

The amount that revenues exceed expenses is referred to as _____.

profit

The weighted average cost (WAC) refers to:

the expected average future cost of funds.

During the start-up phase of a small business the emphasis is on conserving what little cash the new business has.

true

Money borrowed for the purpose of investment in a business is called debt capital.

true

People who buy ownership rights but are not part of the management of the business are known as outside equity investors.

true

The majority of small business start-ups are funded by bootstrapping.

true

When a business enters a phase of rapid growth, one of the challenges it faces is that very few sources of money are available to support its growth.

false