CHAP 5

Question 1

is a comprehensive overview of your financial goals and the steps you need to take to achieve them

Answer 1

financial plan

Question 2

gives a clear vision of the overall operating income and expenses of the business to distinguish if the company will gain profit and will be successful in the business world

Answer 2

financial plan

Question 3

is the process of estimating the capital required and determining its competition. It is the process of framing financial policies in relation to procurement, investment and administration of funds of an enterprise

Answer 3

Financial Planning

Question 4

This will depend upon factors like cost of current and fixed assets; promotional expenses and long-range planning.

Answer 4

Determining capital requirements

Question 5

Capital requirements have to be looked with both aspects

Answer 5

short-term and long-term requirements

Question 6

is the composition of capital, i.e., the relative kind and proportion of capital required in the business. This includes decisions of debt-equity ratio, both short-term and long-term

Answer 6

Determining capital structure

Question 7

with regards to cash control, lending, borrowings, etc.

Answer 7

Framing financial policies

Question 8

A finance manager _______________________________________at least cost in order to get maximum returns on investment

Answer 8

ensures that the scarce financial resources are maximally utilized in the best possible manner

Question 9

is process of framing objectives, policies, procedures, programs and budgets regarding the financial activities of a concern. This ensures effective and adequate financial and investment policies

Answer 9

Financial planning

Question 10

individuals willing to make high-risk investments in early-stage ventures. Typically, these individuals have had successful entrepreneurial experience in the areas of investment they consider. They usually are motivated by their desire to stay engaged in their past area of success but are not willing to follow the tough lifestyle they experienced during their entrepreneurial days.

Answer 10

Angel investors

Question 11

with the mandate and authority to fund business ventures to achieve economic development, environmental, cultural, or social policy objectives formulated by policy makers at various levels of government are good sources of funding, particularly at the early stage

Answer 11

Public funding agencies

Question 12

These are specifically established to invest in high-risk ventures that offer potentially high returns. Their investors entrust them to identify investment opportunities matching specific criteria and expectations, which govern the fund managers’ investment decisions.

Answer 12

Venture capital companies

Question 13

These are specifically established to invest in relatively mature ventures that have at least a modest financial or operational track record while still offering relatively attractive terms in an intermediate time frame (i.e., one to five years).

Answer 13

Private equity (PE) firms

Question 14

They are defined by their investment intentions more than any other factors. They could be a member of any of the previous types of investors we have discussed; however, more often they are larger companies operating or investing in the same industry or a complementary one or market as your venture.

Answer 14

Strategic investors

Question 15

If you have reached a position to deal with banks, you have reached financial nirvana, as banks offer the lowest costs of capital.

Answer 15

Banks

Question 16

This way of raising funds is the most common among startup’s early stages. Putting your money in the project

Answer 16

Funding your own idea

Question 17

It is an excellent way to gather funds for startups with artistic projects or even to raise capital to finance the manufacturing of new technology at a large scale.

Answer 17

Crowdfunding

Question 18

types of crowdfunding

Answer 18

rewards
equity-based

Question 19

One of the best places t o raise funds is from your own house. As your family is well aware of your talents, they will be willing to support you regardless of what you want to do. are the only ones who know your potential and will be willing to give money to start your business.

Answer 19

Friends and Family

Question 20

It is one way of keeping the initial control of the business in your own hand.

Answer 20

Taking A Loan

Question 21

Entering theses contests will be vey helpful to you as, in one hand if you win the competition you will get a source of finance, and on the other hand, you gain publicity for your product and people will be waiting for it to hit the market (it acts as advertisements).

Answer 21

Enter Competitions