False
ANSWER:
False
36. The time value of money is an important component of the rent one pays for using someone else's financial capital.
a.
True
b.
False
ANSWER:
True
37. One principle of entrepreneurial finance is “risk and expected reward go hand in hand."
a.
True
b.
False
ANSWER:
True
38. While cash is the language of business, accounting is the currency.
a.
True
b.
False
ANSWER:
False
39. Private financial markets are a place where standardized contracts or securities are traded on organized securities exchanges with restrictions on how they can be transferred.
a.
True
b.
False
ANSWER:
False
40. A venture's financial objective is to survive.
a.
True
b.
False
ANSWER:
False
41. Free cash flow is the net income forecasted to be available to the venture's owners over time.
a.
True
b.
False
ANSWER:
False
42. Free cash flows are adjusted for risk and the time value of money when used to calculate the value of a venture.
a.
True
b.
False
ANSWER:
True
43. Free cash exists when cash exceeds that which is needed to operate, pay creditors, and invest in assets.
a.
True
b.
False
ANSWER:
True
44. Free cash is all of the cash available to cover operating expenses.
a.
True
b.
False
ANSWER:
False
45. Owner–manager (agency) conflicts are differences between a manager's self-interest and that of the owners who hired the manager.
a.
True
b.
False
ANSWER:
True
46. The owner–debtholder conflict is the divergence of the owners' and lenders' self-interests as the firm gets close to going “public.”
a.
True
b.
False
ANSWER:
False
47. The financial objective of increasing value is inconsistent with developing positive character and reputation.
a.
True
b.
False
ANSWER:
False
48. Venture character and reputation can be assets or liabilities.
a.
True
b.
False
ANSWER:
True
49. Entrepreneurial finance is the application and adaptation of financial tools and techniques to the planning, funding, operations, and valuation of an entrepreneurial venture.
a.
True
b.
False
ANSWER:
True
50. Financial distress occurs when cash flow is insufficient to meet current debt obligations.
a.
True
b.
False
ANSWER:
False
51. The second stage in a successful venture's life cycle is the startup stage.
a.
True
b.
False
ANSWER:
True
52. The rapid-growth stage directly follows the startup stage.
a.
True
b.
False
ANSWER:
False
53. Early-stage ventures include firms in their development, startup, or survival life cycle stages.
a.
True
b.
False
ANSWER:
True