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Entrepreneurship Theory Process Practice

Business

Quiz 14 :

Valuation of Entrepreneurial Ventures

Quiz 14 :

Valuation of Entrepreneurial Ventures

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Adjusted tangible book value is a popular method of valuation.
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True False
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True

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Vesting on founders' stock refers to holders of preferred stock having the right to purchase additional shares when issued by the company.
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True False
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False

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

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Replacement value of a business is based upon the value of each asset if it had to be replaced at current cost.
True False
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Avoiding start-up costs is a factor to consider when valuing a business.
True False
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Entrepreneurs should try to be as objective as possible in determining the fair market value of their enterprise.
True False
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The "timing" of projected income or cash flows is not a critical factor in establishing the value of a firm.
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One of the most common reasons for acquiring a business is developing more growth-phase products.
True False
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Insufficient controls are a strength for a small business and should be considered when the business is being valued.
True False
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When a company is liquidated, preferred stockholders receive a certain fixed amount after assets are distributed to common stockholders.
True False
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The price/earnings ratio is determined by dividing the market price of common stock by retained earnings.
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Buyers and sellers assign different values to a business.
True False
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An entrepreneur does not need to know how to calculate the value of a competitor's operation.
True False
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Tangible assets as well as intangible assets of a business need to be assessed for proper venture evaluation.
True False
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Business valuation is essential when attempting to buy out a partner.
True False
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Emotional bias is not an underlying issue in valuing a business.
True False
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"Why is the business being sold?" is not an important question to ask when analyzing the viability of buying a business.
True False
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The real value of any venture is its potential earning power.
True False
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Increasing market share by acquiring a firm in the company's industry is one reason for the acquisition.
True False
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Weaknesses in small, closely held businesses do not call for careful analysis of the business being valued.
True False
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