Question 1

Financial ratios are control mechanisms to test the financial strengths of a new venture.

Accepted Answer

A) True 
 B)False

Question 2

Sales of stock within an individual state are regulated by:

Accepted Answer

A) the Securities and Exchange Commission. 
B) the NASD. 
C) the Internal Revenue Service. 
D) blue sky examiners. 
A) the Securities and Exchange Commission. 
B) the NASD. 
C) the Internal Revenue Service. 
D) blue sky examiners.

Question 3

The ____ is used to measure the short-term solvency of a venture.

Accepted Answer

A) return on investment 
B) average collection period 
C) debt ratio 
D) current ratio 
A) return on investment 
B) average collection period 
C) debt ratio 
D) current ratio

Question 4

Venture capitalists view going public a highly disadvantageous step since the level of risks involved substantially increase.

Accepted Answer

A) True 
 B)False

Question 5

Replacement value is used only by insurance companies and in very unique circumstances.

Accepted Answer

A) True 
 B)False

Question 6

In the valuation of Internet companies:

Accepted Answer

A) the book value approach is of primary importance. 
B) the replacement value approach plays a significant role. 
C) the qualitative portion of due diligence carries much more weight. 
D) the factor approach is used the overall value. 
A) the book value approach is of primary importance. 
B) the replacement value approach plays a significant role. 
C) the qualitative portion of due diligence carries much more weight. 
D) the factor approach is used the overall value.

Question 7

With the enactment of the Sarbanes-Oxley Act in 2002:

Accepted Answer

A) the expense and administrative responsibilities of being a public company are significantly lower. 
B) corporate governance and disclosure requirements of public companies is subject to greater regulation. 
C) the liability risks of officers and directors less stringent. 
D) the recruitment of qualified independent directors is simpler. 
A) the expense and administrative responsibilities of being a public company are significantly lower. 
B) corporate governance and disclosure requirements of public companies is subject to greater regulation. 
C) the liability risks of officers and directors less stringent. 
D) the recruitment of qualified independent directors is simpler.

Question 8

Which type of risk-capital market is available as a funding source only for high-potential ventures?

Accepted Answer

A) Informal risk capital market 
B) Private venture capital companies 
C) Small business investment companies 
D) Public equity market 
A) Informal risk capital market 
B) Private venture capital companies 
C) Small business investment companies 
D) Public equity market

Question 9

The ____ is calculated by dividing liabilities by total assets.

Accepted Answer

A) debt ratio 
B) current ratio 
C) inventory turn over 
D) net profit margin 
A) debt ratio 
B) current ratio 
C) inventory turn over 
D) net profit margin

Question 10

The return on investment ratio measures the ability of the firm to repay long-term debt using current assets.

Accepted Answer

A) True 
 B)False

Question 11

The debt ratio is calculated by dividing total liabilities by total inventory.

Accepted Answer

A) True 
 B)False

Question 12

Blue-sky laws may speed up the process and lessen costs to the company going public.

Accepted Answer

A) True 
 B)False

Question 13

Which of the following would not typically be part of a private venture capital fund?

Accepted Answer

A) Money from state governments 
B) Money from insurance companies 
C) Money from pension funds 
D) Money from college endowment funds 
A) Money from state governments 
B) Money from insurance companies 
C) Money from pension funds 
D) Money from college endowment funds

Question 14

In a private venture capital firm,the _______ manages the fund in exchange for a management fee and a percentage of profits.

Accepted Answer

A) limited partner 
B) general partner 
C) entrepreneur 
D) referral source 
A) limited partner 
B) general partner 
C) entrepreneur 
D) referral source

Question 15

The current ratio is used to measure the long-term solvency of the venture and its ability to meet short-term debts.

Accepted Answer

A) True 
 B)False

Question 16

A business angel's investment time horizon is usually:

Accepted Answer

A) 1-2 years. 
B) 3-4 years. 
C) 5-6 years. 
D) 7-10 years. 
A) 1-2 years. 
B) 3-4 years. 
C) 5-6 years. 
D) 7-10 years.

Question 17

Balance sheet items are carried at cost,a good indicator of fair market value in valuing a company.

Accepted Answer

A) True 
 B)False

Question 18

To attract venture capital funding,an investment must have significant capital appreciation potential.

Accepted Answer

A) True 
 B)False

Question 19

Dividing net profit by total assets shows a firm's:

Accepted Answer

A) current ratio. 
B) debt ratio. 
C) net profit margin. 
D) return on investment. 
A) current ratio. 
B) debt ratio. 
C) net profit margin. 
D) return on investment.

Question 20

The due diligence phase of the venture-capital process includes:

Accepted Answer

A) outlining the principle terms. 
B) a detailed review of the company's history. 
C) preparation of an investment memorandum. 
D) a preliminary study of the business plan. 
A) outlining the principle terms. 
B) a detailed review of the company's history. 
C) preparation of an investment memorandum. 
D) a preliminary study of the business plan.

Financial ratios are control mechanisms to test the financial strengths of a new venture.

Sales of stock within an individual state are regulated by:

The ____ is used to measure the short-term solvency of a venture.

Venture capitalists view going public a highly disadvantageous step since the level of risks involved substantially increase.

Replacement value is used only by insurance companies and in very unique circumstances.

In the valuation of Internet companies:

With the enactment of the Sarbanes-Oxley Act in 2002:

Which type of risk-capital market is available as a funding source only for high-potential ventures?

The ____ is calculated by dividing liabilities by total assets.

The return on investment ratio measures the ability of the firm to repay long-term debt using current assets.

The debt ratio is calculated by dividing total liabilities by total inventory.

Blue-sky laws may speed up the process and lessen costs to the company going public.

Which of the following would not typically be part of a private venture capital fund?

In a private venture capital firm,the _______ manages the fund in exchange for a management fee and a percentage of profits.

The current ratio is used to measure the long-term solvency of the venture and its ability to meet short-term debts.

A business angel's investment time horizon is usually:

Balance sheet items are carried at cost,a good indicator of fair market value in valuing a company.

To attract venture capital funding,an investment must have significant capital appreciation potential.

Dividing net profit by total assets shows a firm's:

The due diligence phase of the venture-capital process includes:

Entrepreneurship and the Entrepreneurial Mind-Set

Entrepreneurial Intentions and Corporate Entrepreneurship

Entrepreneurial Strategy: Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Intellectual Property and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

The Financial Plan

Sources of Capital

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters

Exam 12: Informal Risk Capital, venture Capital, and Going Public

Financial ratios are control mechanisms to test the financial strengths of a new venture.

Sales of stock within an individual state are regulated by:

The ____ is used to measure the short-term solvency of a venture.

Venture capitalists view going public a highly disadvantageous step since the level of risks involved substantially increase.

Replacement value is used only by insurance companies and in very unique circumstances.

In the valuation of Internet companies:

With the enactment of the Sarbanes-Oxley Act in 2002:

Which type of risk-capital market is available as a funding source only for high-potential ventures?

The ____ is calculated by dividing liabilities by total assets.

The return on investment ratio measures the ability of the firm to repay long-term debt using current assets.

The debt ratio is calculated by dividing total liabilities by total inventory.

Blue-sky laws may speed up the process and lessen costs to the company going public.

Which of the following would not typically be part of a private venture capital fund?

In a private venture capital firm,the _______ manages the fund in exchange for a management fee and a percentage of profits.

The current ratio is used to measure the long-term solvency of the venture and its ability to meet short-term debts.

A business angel's investment time horizon is usually:

Balance sheet items are carried at cost,a good indicator of fair market value in valuing a company.

To attract venture capital funding,an investment must have significant capital appreciation potential.

Dividing net profit by total assets shows a firm's:

The due diligence phase of the venture-capital process includes:

Entrepreneurship and the Entrepreneurial Mind-Set

Entrepreneurial Intentions and Corporate Entrepreneurship

Entrepreneurial Strategy: Generating and Exploiting New Entries

Creativity and the Business Idea

Identifying and Analyzing Domestic and International Opportunities

Intellectual Property and Other Legal Issues for the Entrepreneur

The Business Plan: Creating and Starting the Venture

The Marketing Plan

The Organizational Plan

The Financial Plan

Sources of Capital

Strategies for Growth and Managing the Implication of Growth

Accessing Resources for Growth From External Sources

Succession Planning and Strategies for Harvesting and Ending the Venture

Filters