Question 1

The ________ approach to valuing a business uses the price-earnings ratios of similar businesses to establish the value of a company.

Accepted Answer

A) balance sheet 
B) capitalized earnings 
C) discounted future earnings 
D) market 
A) balance sheet 
B) capitalized earnings 
C) discounted future earnings 
D) market

Question 2

Neither the balance sheet method nor the adjusted balance sheet method of valuing a business considers the future earning power of the business.

Accepted Answer

A) True 
 B)False

Question 3

Using the discounted future earnings approach,the buyer estimates:

Accepted Answer

A) the company's net income for the next six months. 
B) the company's net income for the several years. 
C) the company's net income for several years and then discounted back to the present value. 
D) the company's net asset for several years and then discounted back to the present value. 
A) the company's net income for the next six months. 
B) the company's net income for the several years. 
C) the company's net income for several years and then discounted back to the present value. 
D) the company's net asset for several years and then discounted back to the present value.

Question 4

Loan contracts sometimes prohibit assignments with due-on-sale clauses.

Accepted Answer

A) True 
 B)False

Question 5

The market approach to company valuation evaluates goodwill,risk-of-return,and estimated net earnings.

Accepted Answer

A) True 
 B)False

Question 6

It is important that both the buyer and seller have their objectives thought out,written down,and prioritized when they go into the negotiation.

Accepted Answer

A) True 
 B)False

Question 7

Outline the logical approach one should take in the search stage of buying a business.

Accepted Answer

Buying a business can be a treacherous e

Question 8

When negotiating the deal,it is important to remember that the seller is looking for the best terms and to maintain some contact with the company,at least for a while.

Accepted Answer

A) True 
 B)False

Question 9

The business acquisition process should begin with creating a list of criteria for selecting the business to buy.

Accepted Answer

A) True 
 B)False

Question 10

Both buyers and sellers must recognize that no one benefits without a(n):

Accepted Answer

A) low price. 
B) high price. 
C) agreement. 
D) product. 
A) low price. 
B) high price. 
C) agreement. 
D) product.

The ________ approach to valuing a business uses the price-earnings ratios of similar businesses to establish the value of a company.

Neither the balance sheet method nor the adjusted balance sheet method of valuing a business considers the future earning power of the business.

Using the discounted future earnings approach,the buyer estimates:

Loan contracts sometimes prohibit assignments with due-on-sale clauses.

The market approach to company valuation evaluates goodwill,risk-of-return,and estimated net earnings.

It is important that both the buyer and seller have their objectives thought out,written down,and prioritized when they go into the negotiation.

Outline the logical approach one should take in the search stage of buying a business.

When negotiating the deal,it is important to remember that the seller is looking for the best terms and to maintain some contact with the company,at least for a while.

The business acquisition process should begin with creating a list of criteria for selecting the business to buy.

Both buyers and sellers must recognize that no one benefits without a(n):

Entrepreneurs: the Driving Force Behind Small Business

Ethics and Social Responsibility: Doing the Right Thing

Creativity and Innovation: Keys to Entrepreneurial Success

Strategic Management and the Entrepreneur

Choosing a Form of Ownership

Franchising and the Entrepreneur

New Business Planning Process: Feasibility Analysis,business Modeling,

Building a Bootstrap Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Creating a Solid Financial Plan

Managing Cash Flow

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Supply Chain Management

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

The Legal Environment: Business Law and Government Regulation

Filters

Exam 7: Buying an Existing Business

The ________ approach to valuing a business uses the price-earnings ratios of similar businesses to establish the value of a company.

Neither the balance sheet method nor the adjusted balance sheet method of valuing a business considers the future earning power of the business.

Using the discounted future earnings approach,the buyer estimates:

Loan contracts sometimes prohibit assignments with due-on-sale clauses.

The market approach to company valuation evaluates goodwill,risk-of-return,and estimated net earnings.

It is important that both the buyer and seller have their objectives thought out,written down,and prioritized when they go into the negotiation.

Outline the logical approach one should take in the search stage of buying a business.

When negotiating the deal,it is important to remember that the seller is looking for the best terms and to maintain some contact with the company,at least for a while.

The business acquisition process should begin with creating a list of criteria for selecting the business to buy.

Both buyers and sellers must recognize that no one benefits without a(n):

Entrepreneurs: the Driving Force Behind Small Business

Ethics and Social Responsibility: Doing the Right Thing

Creativity and Innovation: Keys to Entrepreneurial Success

Strategic Management and the Entrepreneur

Choosing a Form of Ownership

Franchising and the Entrepreneur

New Business Planning Process: Feasibility Analysis,business Modeling,

Building a Bootstrap Marketing Plan

Creative Use of Advertising and Promotion

Pricing and Credit Strategies

Global Marketing Strategies

E-Commerce and Entrepreneurship

Creating a Solid Financial Plan

Managing Cash Flow

Sources of Equity Financing

Sources of Debt Financing

Location,layout,and Physical Facilities

Supply Chain Management

Managing Inventory

Staffing and Leading a Growing Company

Management Succession and Risk Management Strategies in the Family Business

The Legal Environment: Business Law and Government Regulation

Filters