Financial Aspects of Business Assessment

Which of the following best describes capital?

• What a business is worth

• The monetary funds invested in a project

• The level of experience the manager of a business has

• What equipment a business needs

Which of the following is a disadvantage of equity capital?

• You must repay or face the possibility of bankruptcy

• Your credit standing may be lowered by the use of equity capital

• You must offer collateral in the form of valuable property

• . You must contend with the investor as a co-owner of the business

Which of the following are the largest lending agencies in the United States?

• Credit unions

• . Banks

• Suppliers

• Business Owners

Which of the following best describes a credit union?

• A community organization providing business owners with education and donations

• A government foundation created to improve people’s credit, particularly the credit of business owners

• A members-only cooperative created by labor unions or groups of employees

• A public establishment for the custody, loan and exchange of funds

Colin is borrowing money from his uncle to start his business. In order to help avoid misunderstandings regarding the loan, Colin should do which of the following?

• Hire a lawyer

• Hire his uncle as the financial director of the business

• Put all agreements in writing

• Involve other family members as witnesses

Which of the following is NOT a type of business risk?

• Routine risk

• Human risk

• Economic risk

• Natural risk

Which type of risks occur from fluctuations in business conditions?

• Routine risk

• Human risk

• Economic risk

• Natural risk

Employee screening and training are considered which method of handling risk?

• Risk retention

• Risk avoidance

• Risk prevention and control

• Risk transfer

Which of the following is TRUE of external theft?

• It is a routine risk which is always preventable

• It is the costliest human risk to businesses

• It is an economic risk and should be covered by insurance

• . It is the only risk which businesses have full control over

Some businesses avoid risks by doing which of the following?

• Only doing business online

• Purchasing multiple insurance policies

• Keeping records of all transactions and customers

• Considering market research