Money Matters Fall Final Review

Which is NOT a criterion banks use for evaluating loan applicants?

• Capital

• Control

• Capability

• Circumstances

Raising your credit standing is an advantage of equity capital.

• True

• False

Sources of capital include which of the following?

• Banks and credit unions

• Suppliers

• Previous owners of the business

• All of the above

Businesses can handle risks through which of the following?

• Controlling risks

• Transferring risks

• Avoiding risks

• All of the above

Which of the following is an example of a natural risk?

• Customer dishonesty

• Competition

• Fire

• Employee error

Which of the following is NOT an example of an economic risk?

• Customer dishonesty

• Competition

• Product obsolescence

• Recession

Ron opened the first McDonald’s® in his small hometown after reading about the success of others in his state. This is an example of which way to enter into business?

• Started his own business

• Purchased an existing business

• Purchased a franchise

• Took over the family business

Advantages of entrepreneurship include which of the following?

• Increased cash flow due to business revenue

• Getting to set your own work schedule

• Putting in less hours than a regular job

• All of the above

Which of the following is the most complicated form of business?

• Corporation

• Franchise

• Partnership

• Sole proprietorship

The factors of a start-up cost estimate include which of the following?

• Size of the business

• Type and amount of inventory needed

• Operating expenses which must be paid before any revenue is received

• All of the above