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.