Exam 11: Financial Preparation for Entrepreneurial Ventures

Financial information is important to entrepreneurs because:

The concept of the net present value method works on the premise that

A fixed cost

When using the internal rate of return method,the future cash flows are discounted at a rate that makes the net present value equal to

Explain pro forma statements.

A variable cost

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

Which of the following are forms of pro forma statements?

The traditional accounting equation is: assets + liabilities = owner's equity.

List the elements of a capital budget and define its main objective.