Entrepreneurship Quiz 1

Question 1

What is equity investment

Answer 1

Funds received by a business in exchange for a percentage of ownership of the business

Question 2

Nonequity financing can come from

Answer 2

Banks, credit cards, asset leasing, individuals, and suppliers

Question 3

Debt is any form of

Answer 3

Of capital infusion that must be paid back with interest

Question 4

Debt

Answer 4

A generic term to describe any type of nonequity funding tied to the business

Question 5

The most common forms of debt for new businesses can be classified as follows

Answer 5

1- loans from
A-banks or finance company
B- individuals
C- founders
2- credit cards
3- supplier credit

Question 6

Loan is

Answer 6

A contractual agreement where by the firm receives some amount of money that amount be repaid over a specified period of time at a specified interest rate

Question 7

Assist based lending

Answer 7

A loan provided for the purchase of a necessary asset for the business

Question 8

Credit card

Answer 8

Card entitling one to resolving credit that is not tied to any particular asset, doesn’t have a set repayment schedule typically has a set upper limit and is usually tied to a much higher interest rate than that of a bank loan

Question 9

Supplier credit

Answer 9

Another form of nonequity funding that is available . Suppliers often provide credit on both physical assets (refrigerators, molding, equipment) and the actual supplies provided

Question 10

Grants

Answer 10

Special funds that do not require repayment and are designed to aid businesses in specific areas

Question 11

Investors can be

Answer 11

Passive or active, majority or minority owners , companies that might ultimately wish to buy the whole new venture, and suppliers looking to add new demand volume for their products

Question 12

Equity investments traditionally involves selling a percentage of the

Answer 12

Business to an outside party

Question 13

Venture capital is

Answer 13

A that is organized to make significant equity investments in high growth new ventures

Question 14

Business angel

Answer 14

Hight net worth individuals who invest in businesses not as a business but as individuals

Question 15

Crowd funding

Answer 15

Funds received by a business by soliciting a large number of small investors usually via the internet

Question 16

Asset leasing

Answer 16

A form of lease tied to a particular asset used by a business to conserve cash and maintain the latest versions of whatever equipment is available

Question 17

Factoring

Answer 17

Selling accounts receivable at a discount to another company to receive immediate cash

Question 18

Private equity funding

Answer 18

A series of funds intended to provide capital to invest in existing businesses that the investors believe can leverage their resources to improve the entrepreneurial venture