Question 1

An entrepreneur must graph at least two numbers, total sales and total expenses, when using the graphic approach for break-even analysis.

Accepted Answer

A) True 
 B)False

Question 2

The handling questionable costs approach of break-even analysis was specifically designed for entrepreneurship firms.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is a decision rule for handling questionable costs?

Accepted Answer

A)  If expected sales are between the two break-even points, the questionable costs behavior needs to be dropped. 
B)  If expected sales don't exceed the higher break-even point, the product should be profitable. 
C)  The product should not be profitable if expected sales do not exceed the lower break-even point. 
D)  Decide which questionable costs to ignore. 
A)  If expected sales are between the two break-even points, the questionable costs behavior needs to be dropped. 
B)  If expected sales don't exceed the higher break-even point, the product should be profitable. 
C)  The product should not be profitable if expected sales do not exceed the lower break-even point. 
D)  Decide which questionable costs to ignore.

Question 4

Many companies continue to use the payback method. It is

Accepted Answer

A)  inexpensive to use. 
B)  more favorable in its short-term effects on earnings. 
C)  an immediate cash payment. 
D)  a longer loan program. 
A)  inexpensive to use. 
B)  more favorable in its short-term effects on earnings. 
C)  an immediate cash payment. 
D)  a longer loan program.

Question 5

Financial information pulls together all the information presented in the other segments of the business.

Accepted Answer

A) True 
 B)False

Question 6

Capital budgeting is designed to show

Accepted Answer

A)  how many projects, in total, should be selected. 
B)  which project is most profitable. 
C)  which of several mutually exclusive projects should be selected 
D)  how to evaluate projects based on rates of return. 
A)  how many projects, in total, should be selected. 
B)  which project is most profitable. 
C)  which of several mutually exclusive projects should be selected 
D)  how to evaluate projects based on rates of return.

Question 7

When using the graphic approach to break-even analysis, the entrepreneur must plot which of the following?

Accepted Answer

A)  total revenue and total costs 
B)  total expenses and total revenue 
C)  total costs and total income 
D)  total income and total expenses 
A)  total revenue and total costs 
B)  total expenses and total revenue 
C)  total costs and total income 
D)  total income and total expenses

Question 8

The traditional accounting equation that verifies the accuracy of the entrepreneur's balance sheet is

Accepted Answer

A)  assets = liabilities + owners' equity. 
B)  assets + liabilities = owner's equity. 
C)  assets + owner's equity = liabilities. 
D)  assets = liabilities - owner's equity. 
A)  assets = liabilities + owners' equity. 
B)  assets + liabilities = owner's equity. 
C)  assets + owner's equity = liabilities. 
D)  assets = liabilities - owner's equity.

Question 9

The first step in the preparation of the cash flow budget is the

Accepted Answer

A)  identification of cash inflows. 
B)  identification of cash outflows. 
C)  identification and timing of cash inflows. 
D)  identification and timing of cash outflows. 
A)  identification of cash inflows. 
B)  identification of cash outflows. 
C)  identification and timing of cash inflows. 
D)  identification and timing of cash outflows.

Question 10

Contained in the pro forma balance sheet is

Accepted Answer

A)  the profit budget. 
B)  the cost budget. 
C)  the cash flow budget. 
D)  the R & D budget. 
A)  the profit budget. 
B)  the cost budget. 
C)  the cash flow budget. 
D)  the R & D budget.

Question 11

Which of the following statements is not True about financial assumptions?

Accepted Answer

A)  They explain how the numbers are derived. 
B)  They should be clear and precise. 
C)  They are the most integral part of the financial segment. 
D)  They do not necessarily correlate with information from other parts of the business. 
A)  They explain how the numbers are derived. 
B)  They should be clear and precise. 
C)  They are the most integral part of the financial segment. 
D)  They do not necessarily correlate with information from other parts of the business.

Question 12

Investments in which returns are expected to extend beyond one year are referred to as

Accepted Answer

A)  capital investments. 
B)  stocks. 
C)  bonds. 
D)  mutual funds. 
A)  capital investments. 
B)  stocks. 
C)  bonds. 
D)  mutual funds.

Question 13

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

Accepted Answer

A)  the sum of beginning inventory and expected sales. 
B)  the sum of the desired ending inventory and the number of units to be sold. 
C)  the sum of beginning inventory and the desired ending inventory. 
D)  an inventory model. 
A)  the sum of beginning inventory and expected sales. 
B)  the sum of the desired ending inventory and the number of units to be sold. 
C)  the sum of beginning inventory and the desired ending inventory. 
D)  an inventory model.

Question 14

A key concept in developing an expense budget is that of

Accepted Answer

A)  fixed costs. 
B)  labor costs. 
C)  taxes. 
D)  rent. 
A)  fixed costs. 
B)  labor costs. 
C)  taxes. 
D)  rent.

Question 15

Which of the following are needed in preparing a pro forma balance sheet?

Accepted Answer

A)  the last balance sheet prepared before the budget period began 
B)  assets 
C)  liabilities 
D)  owners equity 
A)  the last balance sheet prepared before the budget period began 
B)  assets 
C)  liabilities 
D)  owners equity

Question 16

Contribution margin is the difference between

Accepted Answer

A)  selling price and fixed cost per unit. 
B)  purchase price and variable cost per unit. 
C)  selling price and variable cost per unit. 
D)  purchase price and fixed cost per unit. 
A)  selling price and fixed cost per unit. 
B)  purchase price and variable cost per unit. 
C)  selling price and variable cost per unit. 
D)  purchase price and fixed cost per unit.

Question 17

After the operating budget has been prepared, an entrepreneur can proceed to the next phase of the budget process, the cash flow budget.

Accepted Answer

A) True 
 B)False

Question 18

The typical business will have cash inflows from three sources: cash sales, cash payments received on account, and loan proceeds.

Accepted Answer

A) True 
 B)False

Question 19

Break-even analysis is a technique commonly used to assess the

Accepted Answer

A)  rate of return on investment. 
B)  expected product profitability. 
C)  net present value. 
D)  total costs. 
A)  rate of return on investment. 
B)  expected product profitability. 
C)  net present value. 
D)  total costs.

Question 20

The rate used to adjust future cash flows to determine their value in present-period terms is the

Accepted Answer

A)  current interest rate. 
B)  cost of capital. 
C)  rate determined by the ratio of assets to liabilities. 
D)  present value. 
A)  current interest rate. 
B)  cost of capital. 
C)  rate determined by the ratio of assets to liabilities. 
D)  present value.

An entrepreneur must graph at least two numbers, total sales and total expenses, when using the graphic approach for break-even analysis.

The handling questionable costs approach of break-even analysis was specifically designed for entrepreneurship firms.

Which of the following is a decision rule for handling questionable costs?

Many companies continue to use the payback method. It is

Financial information pulls together all the information presented in the other segments of the business.

Capital budgeting is designed to show

When using the graphic approach to break-even analysis, the entrepreneur must plot which of the following?

The traditional accounting equation that verifies the accuracy of the entrepreneur's balance sheet is

The first step in the preparation of the cash flow budget is the

Contained in the pro forma balance sheet is

Which of the following statements is not True about financial assumptions?

Investments in which returns are expected to extend beyond one year are referred to as

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

A key concept in developing an expense budget is that of

Which of the following are needed in preparing a pro forma balance sheet?

Contribution margin is the difference between

After the operating budget has been prepared, an entrepreneur can proceed to the next phase of the budget process, the cash flow budget.

The typical business will have cash inflows from three sources: cash sales, cash payments received on account, and loan proceeds.

Break-even analysis is a technique commonly used to assess the

The rate used to adjust future cash flows to determine their value in present-period terms is the

Entrepreneurship: Evolutionary Development-Revolutionary Impact

The Entrepreneurial Mind-Set in Individuals: Cognition and Ethics

The Entrepreneurial Mind-Set in Organizations: Corporate Entrepreneurship

Social Entrepreneurship and the Global Environment for Entrepreneurship

Innovation: The Creative Pursuit of Ideas

Assessment of Entrepreneurial Opportunities

Pathways to Entrepreneurial Ventures

Sources of Capital for Entrepreneurs

Legal Challenges of Entrepreneurial Ventures

Marketing Challenges for Entrepreneurial Ventures

Developing an Effective Business Plan

Strategic Entrepreneurial Growth

Valuation of Entrepreneurial Ventures

Harvesting the Entrepreneurial Venture

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Exam 11: Financial Preparation for Entrepreneurial Ventures

An entrepreneur must graph at least two numbers, total sales and total expenses, when using the graphic approach for break-even analysis.

The handling questionable costs approach of break-even analysis was specifically designed for entrepreneurship firms.

Which of the following is a decision rule for handling questionable costs?

Many companies continue to use the payback method. It is

Financial information pulls together all the information presented in the other segments of the business.

Capital budgeting is designed to show

When using the graphic approach to break-even analysis, the entrepreneur must plot which of the following?

The traditional accounting equation that verifies the accuracy of the entrepreneur's balance sheet is

The first step in the preparation of the cash flow budget is the

Contained in the pro forma balance sheet is

Which of the following statements is not True about financial assumptions?

Investments in which returns are expected to extend beyond one year are referred to as

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

A key concept in developing an expense budget is that of

Which of the following are needed in preparing a pro forma balance sheet?

Contribution margin is the difference between

After the operating budget has been prepared, an entrepreneur can proceed to the next phase of the budget process, the cash flow budget.

The typical business will have cash inflows from three sources: cash sales, cash payments received on account, and loan proceeds.

Break-even analysis is a technique commonly used to assess the

The rate used to adjust future cash flows to determine their value in present-period terms is the

Entrepreneurship: Evolutionary Development-Revolutionary Impact

The Entrepreneurial Mind-Set in Individuals: Cognition and Ethics

The Entrepreneurial Mind-Set in Organizations: Corporate Entrepreneurship

Social Entrepreneurship and the Global Environment for Entrepreneurship

Innovation: The Creative Pursuit of Ideas

Assessment of Entrepreneurial Opportunities

Pathways to Entrepreneurial Ventures

Sources of Capital for Entrepreneurs

Legal Challenges of Entrepreneurial Ventures

Marketing Challenges for Entrepreneurial Ventures

Developing an Effective Business Plan

Strategic Entrepreneurial Growth

Valuation of Entrepreneurial Ventures

Harvesting the Entrepreneurial Venture

Filters