Midterm MOE

Which of the following statements are correct about operation risk?

• The risk that occurred from employee fraud affects accounting and cash.

• There is no correct answer.

• The risk impacts the day-to-day activity.

• The risk that some negative situations can negatively impact the reputation.

Which of the following statements is most correct about the standard deviation?

• Comparing higher and lower standard deviation, the entrepreneur should select investing in the lower standard deviation business.

• A standard deviation close to 10 indicates that the expected return of the business will be 10%.

• Comparing higher and lower standard deviation, the entrepreneur should select investing in the higher standard deviation business because this investment will bring a higher return.

• There is no correct answer.

Cost structure refers to *

• The combination of production costs and financial costs.

• Structure of costs between products and services.

• The proportion of fixed costs and variable costs.

• Costs that cannot be changed because the costs are already allocated.

Fixed cost refers to *

• Cost of repairing machinery and equipment.

• Costs that can be changed with production volume.

• Costs of production of capital goods.

• Costs that remain unchanged regardless of the amount of production.

Which of the following statements is correct about a balance sheet?

• Equities equal assets plus liabilities.

• Assets equal liabilities plus equity.

• Liabilities equal assets plus equity.

• Assets equal liabilities minus equity.

Which of the following statements is not the objective of financial reporting?

• Entrepreneurs use financial reporting to encourage customers to consider buying more products.

• The venture capitalist uses financial reporting as part of the information for

  supporting investment to entrepreneurs.

• The bank uses financial reporting for making a loan decision.

• Entrepreneurs use financial reporting to consider the business performance.

Which of the following statements is the best description of risk ?

• Risk refers to the uncertainty of an outcome.

• Risk refers to the state of doubt about the future.

• Risk refers to the lack of certainty about an outcome.

• Risk refers to the chance that an outcome will differ from the expected outcome.

The expected return of a business refers to *

• The return that an entrepreneur expects to receive from the business.

• There is no correct answer.

• The return that the bank confirms with the entrepreneur.

• The return that the entrepreneur can guarantee.

Which of the following statements most describe the commercial loan?

• A commercial loan is a kind of debt between an entrepreneur and a financial institution such as a bank.

• A commercial loan is a kind of debt that an entrepreneur borrows from a

  crowdfunding platform.

• A commercial loan is money that you ask for support from your business partners.

• A commercial is a kind of capital that an entrepreneur raises from their shareholders.

Where should an executive summary be in the business plan?

• The last part of the business plan as a conclusion.

• It can be anywhere that the business angel wants to see.

• The first part of the business plan.

• The executive summary is not required as the business plan is already detailed.