Question

Quiz 3

Question 1 The capitalized earnings approach determines the value of a business by capitalizing its expected profits using:

Question 2 Before buying an existing business, the buyer should analyze two external elements of the business:

Question 3 Which of the following is a criterion for a bulk transfer?

Question 4 The valuation method that is commonly used, but tends to oversimplify the valuation process, is called:

Question 5 When negotiating the deal, the most important thing to remember is:

Question 6 ESOP is the acronym for:

Question 7 One advantage of buying an existing business is:

Question 8 The inventory in an existing business:

Question 9 An agreement between a business seller and the buyer, in which the seller agrees not to open a competing business within a specific time period and geographic area, is called a:

Question 10 Perhaps the ideal source of financing the purchase of an existing business is:

Question 11 The biggest source for the best companies to buy is:

Question 12 When it comes to buying an existing business, it is not uncommon to find it:

Question 13 The valuation approach that considers the value of goodwill is the:

Question 14 Which of the following is an intangible asset?

Question 15 When a buyer is reviewing a candidate company’s lease arrangements, location and appearance, intangible assets, etc., he is answering what basic acquisition question?

Question 16 The ________ highlights significant financial and operational events in the company’s life and should concentrate on the company’s accomplishments.

Question 17 The ________ expresses the entrepreneur’s vision for the company and what he/she hopes it will become.

Question 18 The ________ acquaints lenders and investors with the nature of the business and the general goals and objectives of the company.

Question 19 The organization chart is described in which section of the business plan?

Question 20 ________ are short-term, specific targets which are attainable, measurable, and controllable.

Question 21 Potential investors tend to believe that if an entrepreneur can’t develop a good plan:

Question 22 When creating financial forecasts in a business plan for a proposed venture, an entrepreneur should:

Question 23 Business plans need to pass three tests:

Question 24 The second essential purpose for creating a business plan is:

Question 25 The C of the five Cs that is a synonym for “cash flow” is:

Question 26 The ________ is the first part of the business plan. It summarizes all the relevant points of the deal, but it should be the last part written.

Question 27 Any assets pledged to the bank as security for repayment of the loan are the ________ of the five Cs.

Question 28 Proving that a profitable market exists involves:

Question 29 The focus of the competitor analysis section of the business plan is to:

Question 30 An explanation of how the product will be distributed is contained within the: