Reference no: EM131307856
True-False Questions
1. Entrepreneurs provide the financing to individuals who think, reason and act to convert ideas into commercial opportunities and create opportunities.
2. Small businesses, those with less than 500 employees, represent over 99 percent of all employers, and account for about one-half of the gross domestic product in the United States.
3. Small and growing enterprises are critical to the U.S. economy; small firms provide 20 to 30 percent of net new jobs.
4. Nearly half of business failures are due to economic factors such as inadequate sales, insufficient profits, and industry weakness.
5. The “time value of money” is an important component of the rent one pays for using someone else’s financial capital.
6. A venture’s financial objective is to survive.
7. Private financial markets are a place where standardized contracts or securities are traded on organized security exchanges with restrictions on how they can be transferred.
8. Free cash flow is the net income forecast to be available to the venture’s owners over time.
9. Free cash flows are adjusted for risk and the time value of money when used to calculate the value of a venture.
10. Owner-manager (agency) conflicts are differences between manager’s self-interest and that of the owners who hired the manager.
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Perfect positive correlation with the market
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What is the standard deviation of the? stock
: You believe that next year there is a 35?% probability of a recession and 65% probability that the economy will be normal. If your stock will yield negative −9?% in a recession and 23?% in a normal? year, what is the standard deviation of the? stock?
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Calculate the npv of a proposed project
: Given the following information, calculate the NPV of a proposed project: cost=4000 estimated lfe 3 years; initial decrease in accounts receivable=1000 which must be restored at the end of the project's life; estimated salvage value 1000; net income ..
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Gaap stands for general american accounting principles
: The marginal tax rate for the first dollar of taxable income is higher for corporations than for individuals. The marginal tax rate for the first dollar of taxable income is higher for corporations than for individuals. Patents, trade secrets, tradem..
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A ventures financial objective is to survive
: Entrepreneurs provide the financing to individuals who think, reason and act to convert ideas into commercial opportunities and create opportunities. The “time value of money” is an important component of the rent one pays for using someone else’s fi..
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What will the company cash dividend be in seven years
: Four years ago, Bling Diamond, Inc., paid a dividend of $2.35 per share. The company paid a dividend of $2.77 per share yesterday. Dividends will grow over the next five years at the same rate they grew over the last four years. Thereafter, dividends..
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Marketable securities are sold before borrowing funds
: Wizard Electronics Company's actual sales and purchases for April and May are shown here along with forecasted sales and purchases for June through September. The maximum desired cash balance is $50,000. Excess cash (above $50,000) is used to buy mar..
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What will the value of first payment be at end of five year
: Assume that you just received an ordinary annuity with 5 annual payments of $1,000 each. You plan to invest the payments at a 6% annual interest rate. What will the value of the first payment be at the end of the 5th year?
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Calculate the payback period for project
: Maxwell Software, Inc., has the following mutually exclusive projects. Year Project A Project B 0 –$16,000 –$19,000 1 10,000 11,000 2 6,500 7,500 3 2,500 6,500 a-1. Calculate the payback period for each project. What is the NPV for each project if th..
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