Question 1

Emotional bias is likely to have what effect on a seller's valuation of a business?

Accepted Answer

A)  increase the valuation 
B)  decrease the valuation 
C)  have no net effect on the valuation 
D)  none of the above 
A)  increase the valuation 
B)  decrease the valuation 
C)  have no net effect on the valuation 
D)  none of the above A

Question 2

An adjusted tangible book value method includes

Accepted Answer

A)  goodwill. 
B)  patents. 
C)  common price. 
D)  both a and b 
A)  goodwill. 
B)  patents. 
C)  common price. 
D)  both a and b D

Question 3

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

Accepted Answer

A) True 
 B)False  False

Question 4

Which of the following is not a shortcoming that many closely held ventures possess?

Accepted Answer

A)  insufficient controls 
B)  lack of management depth 
C)  high equity and low debt 
D)  divergent goals 
A)  insufficient controls 
B)  lack of management depth 
C)  high equity and low debt 
D)  divergent goals

Question 5

One of the most common reasons for acquiring a business is developing more growth-phase products.

Accepted Answer

A) True 
 B)False

Question 6

List and describe the sources an entrepreneur should examine to find available business buying opportunities.

Accepted Answer

The first source is a business broker. T

Question 7

If you agree that the real value of a business venture is its potential earning power, which valuation method, more than the others, would best determine its True value?

Accepted Answer

A)  adjusted tangible book value 
B)  price/earnings ration 
C)  discounted earnings method 
D)  either a or b 
A)  adjusted tangible book value 
B)  price/earnings ration 
C)  discounted earnings method 
D)  either a or b

Question 8

When considering management, the entrepreneur should be concerned about

Accepted Answer

A)  ownership positions. 
B)  pension and profit sharing. 
C)  total number of employees. 
D)  employee benefits. 
A)  ownership positions. 
B)  pension and profit sharing. 
C)  total number of employees. 
D)  employee benefits.

Question 9

Knowing a venture's pre-money valuation is not possible.

Accepted Answer

A) True 
 B)False

Question 10

Increasing market share by acquiring a firm in the company's industry is one reason for the acquisition.

Accepted Answer

A) True 
 B)False

Question 11

In the context of buying a business, a known commodity may command a higher price for what reason?

Accepted Answer

A)  historical projections have intrinsic value 
B)  avoiding start-up costs has value 
C)  property values are variable 
D)  the value of a founder's stock decreases over time 
A)  historical projections have intrinsic value 
B)  avoiding start-up costs has value 
C)  property values are variable 
D)  the value of a founder's stock decreases over time

Question 12

Avoiding start-up costs is a factor to consider when valuing a business.

Accepted Answer

A) True 
 B)False

Question 13

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

Accepted Answer

A) True 
 B)False

Question 14

When is the size of the labor force in Africa expected to top that of China?

Accepted Answer

A)  by 2015 
B)  by 2020 
C)  by 2030 
D)  by 2040 
A)  by 2015 
B)  by 2020 
C)  by 2030 
D)  by 2040

Question 15

The discounted earnings method of valuation establishes

Accepted Answer

A)  potential earning power. 
B)  an appropriate rate for replacement. 
C)  expectancy of the business expenses. 
D)  future profits. 
A)  potential earning power. 
B)  an appropriate rate for replacement. 
C)  expectancy of the business expenses. 
D)  future profits.

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

When considering physical facilities, the entrepreneur should be concerned about

Accepted Answer

A)  which facilities are owned versus leased. 
B)  which facilities are used for production. 
C)  whether adequate capital is maintained. 
D)  facility upkeep. 
A)  which facilities are owned versus leased. 
B)  which facilities are used for production. 
C)  whether adequate capital is maintained. 
D)  facility upkeep.

Question 18

Tangible assets as well as intangible assets of a business need to be assessed for proper venture evaluation.

Accepted Answer

A) True 
 B)False

Question 19

Besides the purchase price, what else should be considered when buying a business?

Accepted Answer

A)  new inventory and living expenses 
B)  three months' operating expenses and sales tax 
C)  none of the above 
D)  all of the above 
A)  new inventory and living expenses 
B)  three months' operating expenses and sales tax 
C)  none of the above 
D)  all of the above

Question 20

Specific factors of a venture being offered for sale that should be examined include

Accepted Answer

A)  age, trends, and future. 
B)  profits, sales, and operating ratios. 
C)  employees, suppliers, and competitors. 
D)  profits, price, product. 
A)  age, trends, and future. 
B)  profits, sales, and operating ratios. 
C)  employees, suppliers, and competitors. 
D)  profits, price, product.

Emotional bias is likely to have what effect on a seller's valuation of a business?

An adjusted tangible book value method includes

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

Which of the following is not a shortcoming that many closely held ventures possess?

One of the most common reasons for acquiring a business is developing more growth-phase products.

List and describe the sources an entrepreneur should examine to find available business buying opportunities.

If you agree that the real value of a business venture is its potential earning power, which valuation method, more than the others, would best determine its True value?

When considering management, the entrepreneur should be concerned about

Knowing a venture's pre-money valuation is not possible.

Increasing market share by acquiring a firm in the company's industry is one reason for the acquisition.

In the context of buying a business, a known commodity may command a higher price for what reason?

Avoiding start-up costs is a factor to consider when valuing a business.

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

When is the size of the labor force in Africa expected to top that of China?

The discounted earnings method of valuation establishes

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

When considering physical facilities, the entrepreneur should be concerned about

Tangible assets as well as intangible assets of a business need to be assessed for proper venture evaluation.

Besides the purchase price, what else should be considered when buying a business?

Specific factors of a venture being offered for sale that should be examined include

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

Financial Preparation for Entrepreneurial Ventures

Developing an Effective Business Plan

Strategic Entrepreneurial Growth

Harvesting the Entrepreneurial Venture

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Exam 14: Valuation of Entrepreneurial Ventures

Emotional bias is likely to have what effect on a seller's valuation of a business?

An adjusted tangible book value method includes

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

Which of the following is not a shortcoming that many closely held ventures possess?

One of the most common reasons for acquiring a business is developing more growth-phase products.

List and describe the sources an entrepreneur should examine to find available business buying opportunities.

If you agree that the real value of a business venture is its potential earning power, which valuation method, more than the others, would best determine its True value?

When considering management, the entrepreneur should be concerned about

Knowing a venture's pre-money valuation is not possible.

Increasing market share by acquiring a firm in the company's industry is one reason for the acquisition.

In the context of buying a business, a known commodity may command a higher price for what reason?

Avoiding start-up costs is a factor to consider when valuing a business.

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

When is the size of the labor force in Africa expected to top that of China?

The discounted earnings method of valuation establishes

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

When considering physical facilities, the entrepreneur should be concerned about

Tangible assets as well as intangible assets of a business need to be assessed for proper venture evaluation.

Besides the purchase price, what else should be considered when buying a business?

Specific factors of a venture being offered for sale that should be examined include

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

Financial Preparation for Entrepreneurial Ventures

Developing an Effective Business Plan

Strategic Entrepreneurial Growth

Harvesting the Entrepreneurial Venture

Filters