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Small Business Financing Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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Question 1 1. Which of the following funding sources is an agency of the United States government?

Question 2 2. Which of the following funding sources is most likely to allow an entrepreneur to retain total personal control over his or her business?

Question 3 3. Which type of funding source is primarily interested in backing businesses that have a high growth potential?

Question 4 4. What is an angel investor?

Question 5 5. What is a risk of working with an angel investor?

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Question 6 6. What is an important characteristic of a business owner to lure an angel investor?

Question 7 7. Which statement is correct regarding start-up budgets?

Question 8 8. What is a start-up budget?

Question 9 9. Which parties typically request and research the start-up budget?

Question 10 10. After allocating the resources, a company CEO is trying to control and monitor the acquisition, allocation and utilization of the financial resources. Should the CEO even perform financial control?

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Question 11 11. Why is financial feasibility an important step in financial planning?

Question 12 12. Tom works in accounting, and he has to prepare a budget that will take into account all of the activities of the company. There will be a strong investment from the acquisitions department that will impact their budget but is worth less than 2% of the company's value. Should Tom wait for a new report from the acquisition's department?

Question 13 13. Which of the following BEST defines long-term financing?

Question 14 14. Why are government grants considered the cheapest form of long-term financing?

Question 15 15. How is a secured loan different from an unsecured loan?

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Question 16 16. Which of the following is TRUE of asset-based loan product lenders?

Question 17 17. Which of the following is typically an acceptable asset used to guarantee an asset-based loan?

Question 18 18. Which of the following is a common use for the proceeds of asset-based lending?

Question 19 19. Which of the following is the best explanation of short-term financing?

Question 20 20. Barry takes out a 12 month loan from a bank to buy some new office equipment. The bank requires that Barry put up the equipment he is purchasing as collateral. What type of credit arrangement is involved?

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Question 21 21. Why might a business choose trade credit over other forms of short-term financing?

Question 22 22. When is bootstrapping used?

Question 23 23. What are the two methods of bootstrapping?

Question 24 24. What is one type of bootstrapping that cannot be used for a business strat-up?

Question 25 25. Which type of funding source involves making an appeal to the general public to raise funds?

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Question 26 26. What is one way angel investors vary from venture capitalists?

Question 27 27. Which of the following might NOT be included in a start-up budget?

Question 28 28. What type of budget provides an estimation of costs and revenue regarding a long-term business venture or fixed asset?

Question 29 29. John is the owner of a small IT company. In exchange for a financial investment, he gave his friend Katerina 10% of the company. This is an example of what type of financing?

Question 30 30. Which of the following is TRUE of a company that is young and lacks significant assets?

Small Business Financing Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next question. You can skip questions if you would like and come back to them later with the "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. You will lose your work if you close or refresh this page. Good luck!

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