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 type of funding source involves making an appeal to the general public to raise funds?

Question 2 2. Which type of funding source involves 'thinking outside the box' and trading goods and services to get the resources an entrepreneur needs for 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. Why is financial feasibility an important step in financial planning?

Question 5 5. 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?

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Question 6 6. What type of budget provides an estimation of costs and revenue regarding a long-term business venture or fixed asset?

Question 7 7. Which of the following is the best explanation of short-term financing?

Question 8 8. Which type of credit involves the bank allowing a borrower to borrow money on an as needed basis up to a preset maximum?

Question 9 9. Why might a business choose trade credit over other forms of short-term financing?

Question 10 10. What are the two methods of bootstrapping?

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Question 11 11. What is one type of bootstrapping that CANNOT be used for a business start-up?

Question 12 12. What is bootstrapping used for?

Question 13 13. Which statement is correct regarding start-up budgets?

Question 14 14. Which of the following might NOT be included in a start-up budget?

Question 15 15. Name two additional expenses that should be considered for inclusion in the start-up budget.

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Question 16 16. Which of the following BEST defines long-term financing?

Question 17 17. What type of financing involves investors becoming creditors?

Question 18 18. 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 19 19. Which of the following is TRUE of asset-based loan product lenders?

Question 20 20. Which of the following is typically an acceptable asset used to guarantee an asset-based loan?

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Question 21 21. Which of the following is an example of a form of asset-based lending?

Question 22 22. What is a benefit of working with an angel investor?

Question 23 23. What is an angel investor?

Question 24 24. What is an important characteristic of a business owner to lure an angel investor?

Question 25 25. Which of the following funding sources is an agency of the United States government?

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Question 26 26. 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?

Question 27 27. Kevin is an investment banker who wants to wine and dine with prospective clients. He may not have all of the cash he requires to pay. Why should he use a credit card?

Question 28 28. When is bootstrapping used?

Question 29 29. What is a start-up budget?

Question 30 30. Why are government grants considered the cheapest form of long-term financing?

Small Business Financing Chapter 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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