Exam 11: Financial Preparation for Entrepreneurial Ventures

The traditional accounting equation is: Assets + Liabilities = Owners' Equity.

One of the easiest capital budgeting methods to understand is

Capital budgeting is designed to show

For a manufacturing firm, the production budget represents the number of units that must be produced

The net present value method is a capital budgeting technique that helps to minimize some of the shortcomings of the payback method by

The cash-flow budget provides an overview of cash inflows and outflows for the budget period.

In the simple linear regression analysis equation, Y = a + bx, which of the following variables represents expected sales?

In the production budget for a manufacturing firm, the number of units needed in inventory is determined by

Horizontal analysis looks at financial statements and ratios over time.

When using regression analysis, the entrepreneur may draw conclusions about the relationship between product sales and advertising expenditures.

The set of assumptions on which financial projections are based have little meaning.

A fixed cost

The pro forma income statement is prepared before the pro forma balance sheet.

Capital budgeting is used to help the entrepreneur plan for capital depreciation.

A method that discounts future cash flows at a rate that makes the net present value of the project equal to zero is known as the

Accounts receivable turnover measures the rate at which accounts receivable are being collected on a monthly basis.

When using the graphic approach to break-even analysis, the entrepreneur must plot total _____ and total _____.

The first step in the preparation of the cash-flow budget is the identification and timing of cash outflows.

Which of the following balance sheet ratios measures solvency?

A manufacturing firm needs to establish which of the following budgets?