Exam 14: Valuation of Entrepreneurial Ventures

An entrepreneur does not need to know how to calculate the value of a competitor's operation.

List some questions to ask before making a potential purchase, and explain why each is important.

Emotional bias is not an underlying issue in valuing a business.

Which of the following methods of valuation was developed by the U.S. Treasury to determine a firm's intangible assets?

"Why is the business being sold?" is not an important question to ask when analyzing the viability of buying a business.

Goodwill, patents, deferred financing costs, and other intangible assets are considered when computing

The price/earnings ratio is determined by dividing the market price of common stock by retained earnings.

When considering sales and distribution, the entrepreneur should be concerned about

How much revenue did Facebook raise with its initial public offering (IPO) in 2012?

A drawback to the price/earnings ratio method is that

Closely held ventures usually suffer from which of the following shortcomings?

Potential earning power, which determines the true value of the firm, is best calculated using the _____ method.

The real value of any venture is its potential earning power.

Explain the purpose of a letter of intent.

Weaknesses in small, closely held businesses do not call for careful analysis of the business being valued.

The price/earnings ratio is determined by

Which of the following does a post-money valuation include that a pre-money valuation does not?

Goodwill, family members on the payroll, and planned losses are examples of

When considering employees, the entrepreneur should be concerned about

The "timing" of projected income or cash flows is not a critical factor in establishing the value of a firm.