Question 1

What is "collateral" and why is it one of the "Cs" of credit?

Accepted Answer

The answer of What is "collateral" and why is it...

Question 2

The business and industry profile section of the business plan should cover existing and anticipated profitability of firms in the targeted market segment and any significant entry or exit of firms.

Accepted Answer

The statement is true. The business and industry profile section of the business plan should provide information on existing and anticipated profitability of firms in the targeted market segment and any significant entry or exit of firms. This information helps the entrepreneur to assess the competitive landscape and plan accordingly.

Question 3

The conditions surrounding a loan request typically never affect the owner's chance of receiving funds.

Accepted Answer

The conditions surrounding a loan request, such as credit score, income, and collateral, can greatly affect the owner's chance of receiving funds. Lenders consider these factors when assessing the risk of lending money to an individual or business.

Question 4

You have been asked to explain the basic elements of a sound business plan to your friend, who is considering beginning a new business. What elements should you recommend (s)he include in her/his business plan?

Accepted Answer

The answer of You have been asked to explain the...

Question 5

When presenting a plan to a venture capital firm, the allotted time is usually less than 20 minutes and rarely more than 30.

Accepted Answer

This is true, as venture capitalists typically have limited time to review and evaluate potential investments, so entrepreneurs presenting their business plans need to be concise and impactful in a short amount of time.

Question 6

In a business plan, both company goals and objectives should relate to the company's mission.

Accepted Answer

Company goals and objectives should align with the overall mission of the company in order to ensure that all efforts are working towards the same end goal.

Question 7

The executive summary of a business plan should summarize all of the relevant points of the proposed venture and should be concise - no more than one page.

Accepted Answer

The executive summary should effectively summarize the key aspects of the business plan, but it should also be succinct and limited to one page.

Question 8

A small business must have a stable capital base before any lender will grant a loan.

Accepted Answer

Lenders typically look for a stable financial foundation and evidence of consistent cash flow before considering lending money to a small business. Without a stable capital base, a small business may not be regarded as a viable borrowing prospect.

Question 9

In the business and industry profile section of the business plan, the entrepreneur should provide information on the size of the market, growth trends, and the relative economic and competitive strength of the industry's major players.

Accepted Answer

In the business and industry profile section of the business plan, the entrepreneur should provide information on the size of the market, growth trends, and the relative economic and competitive strength of the industry's major players.

Question 10

Which of the following is not one of the five Cs of credit?

Accepted Answer

The five Cs of credit are Capital, Capacity, Collateral, Conditions, and Character. "Connections" is not one of the five Cs of credit.

Question 11

Which of the following is a basic area that a business plan presentation should cover?

Accepted Answer

A business plan presentation should cover all of the above areas, including introducing the company and its products, explaining the problem that the business is trying to solve, and outlining the company's business model.

Question 12

The purpose of covering the ________ in the business plan presentation is to show lenders and investors how the company will produce an attractive payback or payoff.

Accepted Answer

The business model describes the company's revenue streams and cost structure, which are important factors for lenders and investors to determine the feasibility and profitability of the venture. It includes information about the target market, pricing strategy, sales channels, and operating expenses, which all contribute to the expected return on investment. Therefore, a well-defined business model can demonstrate how the company will generate sufficient cash flow to repay the loans or provide a reasonable return to the investors.

Question 13

The executive summary serves as the thesis statement for the entire business plan.

Accepted Answer

The answer of The executive summary serves as the thesis...

Question 14

When presenting a business plan to a venture capital forum, the allotted time is rarely more than ________ minutes.

Accepted Answer

The allotted time for presenting a business plan to a venture capital forum is typically 20 minutes.

Question 15

One of the areas a business plan presentation should cover is the capital structure.

Accepted Answer

The answer of One of the areas a business plan...

Question 16

The company's mission statement expresses in words the entrepreneur's vision for what her/his company is and what it is to become.

Accepted Answer

The statement is true. A mission statement outlines the purpose and goals of a company and is often used as a tool to communicate the company's values to its stakeholders.

Question 17

Business assets are lenders' ________ resort for repayment of an outstanding loan.

Accepted Answer

Business assets are usually the last resort for lenders to recoup their money in case the borrower defaults on their loan. Lenders usually exhaust all other options before seizing business assets and liquidating them to recover their losses.

Question 18

A synonym for capacity is capital.

Accepted Answer

Capacity refers to the maximum amount that something can hold or produce, while capital refers to financial or economic resources that can be used to generate income or achieve a goal. While capacity and capital may be related in certain contexts, they are not synonymous.

Question 19

The executive summary of a business plan should highlight significant financial and operational events.

Accepted Answer

The answer of The executive summary of a business plan...

Question 20

________ includes any assets an entrepreneur pledges to a lender as security for repayment of the loan.

Accepted Answer

Collateral refers to assets that are put up as security for repayment of a loan. It can include property, inventory, equipment, or any other valuable assets owned by the entrepreneur. If the entrepreneur is unable to repay the loan, the lender may seize and sell these assets to recover their funds.

Quiz 5: Crafting a Business Plan and Building a Solid Strategic Plan

What is "collateral" and why is it one of the "Cs" of credit?

The business and industry profile section of the business plan should cover existing and anticipated profitability of firms in the targeted market segment and any significant entry or exit of firms.

The conditions surrounding a loan request typically never affect the owner's chance of receiving funds.

You have been asked to explain the basic elements of a sound business plan to your friend, who is considering beginning a new business. What elements should you recommend (s)he include in her/his business plan?

When presenting a plan to a venture capital firm, the allotted time is usually less than 20 minutes and rarely more than 30.

In a business plan, both company goals and objectives should relate to the company's mission.

The executive summary of a business plan should summarize all of the relevant points of the proposed venture and should be concise - no more than one page.

A small business must have a stable capital base before any lender will grant a loan.

In the business and industry profile section of the business plan, the entrepreneur should provide information on the size of the market, growth trends, and the relative economic and competitive strength of the industry's major players.

Which of the following is not one of the five Cs of credit?

Which of the following is a basic area that a business plan presentation should cover?

The purpose of covering the ________ in the business plan presentation is to show lenders and investors how the company will produce an attractive payback or payoff.

The executive summary serves as the thesis statement for the entire business plan.

When presenting a business plan to a venture capital forum, the allotted time is rarely more than ________ minutes.

One of the areas a business plan presentation should cover is the capital structure.

The company's mission statement expresses in words the entrepreneur's vision for what her/his company is and what it is to become.

Business assets are lenders' ________ resort for repayment of an outstanding loan.

A synonym for capacity is capital.

The executive summary of a business plan should highlight significant financial and operational events.

________ includes any assets an entrepreneur pledges to a lender as security for repayment of the loan.