Which of the following is a similarity between venture capital firms and angel investors?
A) Both invest in start-up companies with high growth potential in exchange for a share of ownership.
B) Both charge very high interest rates and structure loans to be repaid in months rather than years.
C) Both require an entrepreneur to provide a minimum of twenty-five to thirty percent of the start-up costs.
D) Both only finance large corporations that operate in universal and generic markets.
Question 2 - What is the primary disadvantage of both a sole proprietorship and a partnership that a corporation overcomes?
A) No access to capital
B) Taxing complications
C) Unlimited liability
D) Ease of start-up
E) Lack of secrecy
Question 3 - The balance sheet is composed of
A) owners' equity, assets, and liabilities.
B) expenses, revenue, and net income.
C) revenue, expenses, and owners' equity.
D) assets, expenses, and net income.
E) assets, liabilities, and revenues.
Question 4 - In the first set of Hawthorne experiments dealing with lighting, the main conclusion was that
A) the pressure of social acceptance affects production.
B) a sense of involvement affects production.
C) variations in lighting affect production.
D) the piece-rate method affects production.
E) only the amount of pay affects production.
Question 5 - Which of the following bodies assists entrepreneurs by guaranteeing loans from local commercial lenders?
A) The Federal Reserve
B) The Patent and Trademark Office
C) The Small Business Administration
D) The Department of the Treasury
Question 6 - Jack has been saving his excess funds for several years and has contemplated entering a partnership with a friend from college. Jack hesitates because he knows that it is ____ to invest money in a partnership and ____ to get the money back out.
A) difficult; difficult
B) easy; difficult
C) easy; impossible
D) easy; easy
E) difficult; easy
Question 7 - Assets = liabilities + owners' equity is the equation for information reported on the
A) checking balance.
B) balance sheet.
C) income statement.
D) earnings statement.
E) statement of owners' equity.
Question 8 - Determining how the work environment affects productivity was the original objective of
A) Taylor's scientific management.
B) the Hawthorne studies.
C) McGregor's Theory X and Theory Y.
D) Herzberg's theory.
E) Maslow's hierarchy of needs.
Question 9 - Small business start-ups are likely to find that getting commercial loans is:
A) difficult because commercial lenders are reluctant to give loans to firms that do not have an established record of successful performance.
B) one of the easiest and most flexible ways of obtaining financing because local bankers are usually eager to establish relationships with new companies.
C) relatively difficult because start-ups require much higher financing costs than other sources.
D) the best way to obtain all the financing they need as lenders usually get an ownership stake in the companies.
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