Entrepreneurial Finance Fundamentals Quiz

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Questions and Answers

What is the term for the owner's own money, which fulfills a limited requirement of the enterprise?

  • Retained Profit
  • Internal Source (correct)
  • External Source
  • Working Capital

Which type of capital is the money invested in current assets like raw material, finished goods, machinery, equipment, and furniture?

  • Retained Profit
  • Fixed Capital (correct)
  • Personal Savings of the Owner
  • Working Capital

What is the term for the money required for the day-to-day operations of a business or enterprise?

  • Sale of Assets
  • Working Capital (correct)
  • External Source
  • Fixed Capital

Which source of finance involves profit earned by an entrepreneur and may be used to finance the future needs of a firm?

<p>Retained Profit (D)</p> Signup and view all the answers

What may be used for fund, such as PF, insurance policy, investment, and building, by the owner?

<p>Personal Savings of the Owner (C)</p> Signup and view all the answers

What involves taking goods, machinery, or plant on credit basis for a particular time period by giving bank security to the supplier?

<p>Deferred Credit (B)</p> Signup and view all the answers

What factors do lenders consider when assessing a business's financial projections and ability to repay a loan?

<p>Cash flow, ability to return to work, and other income sources (A)</p> Signup and view all the answers

In case of a failed venture, what do lenders assess regarding collateral?

<p>The insurance coverage and marketability of the collateral (B)</p> Signup and view all the answers

What do lenders consider when assessing business conditions?

<p>Economic trends, community trends, and seasonality (D)</p> Signup and view all the answers

Why are lenders more likely to invest in a new business if there is a substantial financial commitment from the owner?

<p>To easily back out if the venture fails (C)</p> Signup and view all the answers

What can insufficient personal capital lead to in a business?

<p>Equity or debt in a business (A)</p> Signup and view all the answers

What are commercial loans divided into?

<p>Short-term, long-term, and intermediate-term (1-5 years) (C)</p> Signup and view all the answers

What does Venture Capital provide to companies?

<p>Seed, start-up, and first-stage finance (B)</p> Signup and view all the answers

What is the term for the money invested in current assets like raw material, finished goods, machinery, equipment, and furniture?

<p>Fixed Capital (C)</p> Signup and view all the answers

What is the term for the money required for the day-to-day operations of a business or enterprise?

<p>Working Capital (B)</p> Signup and view all the answers

Which source of finance involves profit earned by an entrepreneur and may be used to finance the future needs of a firm?

<p>Retained Profit (B)</p> Signup and view all the answers

What involves taking goods, machinery, or plant on credit basis for a particular time period by giving bank security to the supplier?

<p>Deferred Credit (D)</p> Signup and view all the answers

What can insufficient personal capital lead to in a business?

<p>Greater risk of insolvency (A)</p> Signup and view all the answers

What do lenders assess when considering the ability of a new business to repay a loan?

<p>Economic trends (C)</p> Signup and view all the answers

Which type of loan covers operational expenses like rent, insurance, advertising, inventory, or salaries?

<p>Short-term loan (D)</p> Signup and view all the answers

What is the term for the money invested in current assets like raw material, finished goods, machinery, equipment, and furniture?

<p>Working capital (B)</p> Signup and view all the answers

What type of finance provides seed, start-up, and first-stage finance to companies with business potential but lack access to public securities markets or credit-oriented institutions?

<p>Venture Capital funding (B)</p> Signup and view all the answers

What do lenders assess when determining if collateral will cover a loan?

<p>Insurance policies (A)</p> Signup and view all the answers

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