Exam 14: Valuation of Entrepreneurial Ventures

The price/earnings ratio is determined by

The discounted earnings method of valuation establishes

Return on investment

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

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

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

If cash flow is deemed the most important consideration in buying a business,which valuation method is likely to be used?

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

Traditional valuation methods includes all of the following except:

What hidden costs are involved when establishing the value of a firm?

List and briefly explain the three methods utilized for business evaluation.

Business valuation is essential when attempting to buy out a partner.

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

Explain the purpose of a letter of intent.

Sales and earnings of a venture are projected from

Buyers and sellers assign different values to a business.

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

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

Replacement value of a business is based upon the value of each asset if it had to be replaced at a certain cost.

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