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Entrepreneurship Theory Process Practice
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Entrepreneurship Theory Process Practice
Business
Quiz 11 :
Financial Preparation for Entrepreneurial Ventures
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Quiz 11 :
Financial Preparation for Entrepreneurial Ventures
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The pro forma income statement is prepared before the pro forma balance sheet.
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True False
Q01
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True
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When using regression analysis, the entrepreneur may draw conclusions about the relationship between product sales and advertising expenditures.
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Q02
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Break-even analysis is used to tell how many units must be sold in order to break even at a particular selling price.
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True False
Q03
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Accounts receivable turnover measures the rate at which accounts receivable are being collected on a monthly basis.
True False
Q04
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Financial information pulls together all the information presented in the other segments of the business.
True False
Q05
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The first type of expense to be estimated when preparing an operating budget is cost of goods sold.
True False
Q06
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An entrepreneur must graph at least two numbers-total sales and total expenses-when using the graphic approach for break-even analysis.
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Q07
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Horizontal analysis looks at financial statements and ratios over time.
True False
Q08
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The cash-flow budget provides an overview of cash inflows and outflows for the budget period.
True False
Q09
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After the operating budget has been prepared, an entrepreneur can proceed to the next phase of the budget process, which is the cash-flow budget.
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Q10
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Capital investments or capital expenditures are expected to last beyond one year.
True False
Q11
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The traditional accounting equation is: Assets + Liabilities = Owners' Equity.
True False
Q12
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Contribution margin is the difference between the selling price and the fixed cost per unit.
True False
Q13
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A budget is one of the most powerful tools that an entrepreneur can use in planning business operations.
True False
Q14
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The first step in the preparation of the cash-flow budget is the identification and timing of cash outflows.
True False
Q15
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The principal objective of capital budgeting is to maximize the value of the firm.
True False
Q16
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The typical business will have cash inflows from three sources: cash sales, cash payments received on account, and loan proceeds.
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Q17
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It is typical for a firm to prepare an operating budget but not a cash-flow budget.
True False
Q18
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The handling questionable costs approach of break-even analysis was specifically designed for firms that have expenses that are difficult to assign.
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Q19
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Pro forma statements show the firm's present financial position.
True False
Q20
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