Quiz 4 Ent. Leadership

A noncompete agreement prevents an invidious from competing against a former employer for a specific period of time.

True

If a firm's debt-to-equity ratio gets to high, it may have trouble meeting its obligations and securing the level of financing needed to fuel its growth

True

The Partnering for Success feature in Chapter 8 focuses on buying groups, and recommends that small businesses seek out buying groups to participate in. What is a "buying group" in the context of the feature?

A partnership that bands small businesses together to obtain volume discounts on common products and services that they buy

A ____ partnership is a modified form of a general partnership.

Joint

A _____ sets forth the rights and duties of the general and limited partners, along with the details of how the partnership will be managers and eventually dissolved.

Limited partnership agreement

Which of the following was not identified as one of the four main financial objectives of a firm?

Timeliness

The break-even point for a new restaurant or product is the point where the total revenue received equals total costs associated with the output of the restaurant or the sale of the product.

True

The statement of cash flows summarizes the changes in a firm's cash position for a specified period of time and details why the change occurred.

True

A corporation is formed by filing ___ with the Secretary of State's office isn't he state of incorporation

Articles of incorporation

The pro forma ____ provides a firm a sense of how its activities will affect its ability to meet its short-term liabilities and how its financiers will evolve over time.

Balance sheet

Most C corporations have two classes of stock - ___ and ___.

Common: perferred

A firm's working capital is defined as its fixed assets minus its long-term liabilities.

False

It is important for an entrepreneur to select an attorney as late as possible when developing a business venture

False

The income statement records all the revenue and expenses for a given period and shows whether the firm is making a profit or is experiencing a loss.

False

A(n) ___ is a written document that deals with issues such as the relative split of the equity among the founders of the firm, how individual founders will be compensated for the cash or the "sweat equity" they put into the firm, and how long the founders will have to remain with the firm for their shares to fully vest.

Founders agreement

A firm's profit margin, or return on sales, is computed by dividing ____

Net income by net sales

Tempered Mind, the company profiled in the operation feature in Chapter 7, has created an iPhone app that teaches users' a forge in language as they program through the stages of a game. To get Tempered Mind off to a strong ethical star, the company was careful to avoid a temptation that mobile app developers have. That temptation, mentioned in the profile, is to ___.

Pay people to write positive reviews

___ stock is typically issued to conservative investors who have preferential rights over common stockholders in regard to dividends and to the assets of the corporation in the event of liquidation.

Preferred

The four main financial objectives of a firm are:

profitability, liquidity, efficiency, stability