Name:
Class:
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Chapter 01: Introduction to Finance for Entrepreneurs
True / False 1. It is estimated that more than one million new businesses are started in the United States each year. a. True b. False
ANSWER: True
2. Reasonable estimates place nonemployer (e.g., single person or small family) businesses started each year at less than 100,000 a. True b.False
ANSWER: False
3. The entrepreneurial process involves: developing opportunities, gathering resources, and managing and building operations, all with the goal of creating value. a. True b. False
ANSWER: True
4. A market-oriented economic system provides an environment that fosters the formation, development, and transformation of ideas into useful products and services. a. True b. False
ANSWER: True
5. Capitalism is a market-oriented system that prohibits private ownership of physical and financial assets. a. True b. False
ANSWER: False
6. Democratic capitalism exists where a country or state organized as a democracy adopts a capitalistic economic system. a. True b. False
ANSWER: True
7. Entrepreneurs provide the financing to individuals who think, reason, and act to convert ideas into commercial opportunities and create opportunities. a. True b. False
ANSWER: False
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Chapter 01: Introduction to Finance for Entrepreneurs
8. Entrepreneurship is the process of changing ideas into commercial opportunities and creating value. a. True b. False
ANSWER: True
9. An entrepreneur is an individual who thinks, reasons, and acts to convert ideas into commercial opportunities and to create value. a. True b. False
ANSWER: True
10. Mark Twain once said, "I was always able to see an opportunity before it became one." a. True b. False
ANSWER: False
11. Around two-thirds of new employers survive at least two years, and only about one-half survive for at least five years. a. True b. False
ANSWER: True
12. A study of the U.S. Census Bureau's Characteristics of Business Owners database suggests that about two-thirds c closed businesses were successful at closure. a. True b. False
ANSWER: False
13. Nearly half of business failures are due to economic factors such as inadequate sales, insufficient profits, and industry weakness. a. True b.False
ANSWER: True
14. Financial causes, such as excessive debt and insufficient financial capital, are not major contributors to business failures. a. True b. False
ANSWER: False
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Chapter 01: Introduction to Finance for Entrepreneurs
15. Although the risks associated with starting a new entrepreneurial venture are large, there is always room for one more success. a. True b. False
ANSWER: True
16. Fads are large societal, demographic, or technological trends or changes that are slow in forming but, once in place, continue for many years. a. True b. False
ANSWER: False
17. Fads are not predictable, have short lives, and do not involve macro changes. a. True b. False
ANSWER: True
18. Three of the major megatrends discussed in Chapter 1 include: societal trends or changes, demographic trends or changes, and technological trends