Test Bank for Entrepreneurial Finance 4th Edition Leach, Melicher

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Chapter 1 / Exercise 2
Entrepreneurial Finance
Leach/Melicher
Expert Verified
download full file at CHAPTER 2FROM THE IDEA TO THE BUSINESS PLANTrue-False QuestionsT.1. For ventures that first get to market or create intellectual property rights, it’scommon to price new products or services at high markups or profit margins.
2. Lifestyle firms are growth-driven in terms of revenues, profits, and cash flows and also performance-oriented as reflected in rapid value creation over time.
3. “Salary-replacement” firms provide their owners with income levels comparable to what they could have earned working for much larger firms.
4. An entrepreneur may start a number of different types of businesses, including salary-replacement firms, lifestyle firms, and entrepreneurial firms orventures.
5. “Entrepreneurial ventures” are firms that allow owners to pursue specific lifestyles while being paid for doing what they like to do.
6. Entrepreneurial ventures emphasize survival and providing an acceptable living for their owners with growth being a secondary goal.
7. A sound business model is a plan to generate investor interest, make profits,and grow asset investments.
8. A sound business model should provide a plan to generate revenues, make profits, and produce free cash flows.
9. Mark Twain said: “Like I tell anybody, if you fail to plan, you’re planning to fail.”
10. Best practices of high-growth, high-performance firms applied in the marketing practices area include “developing new products or services that are considered to be the best.”
11. Best practices of high-growth, high-performance firms applied in the marketing practices area include “preparing detailed monthly financial plans for the next year and annual financial plans for the next five years.
12. Best practices of high-growth, high-performance firms applied in the financial practices area include “preparing detailed monthly financial plans forthe next year and annual financial plans for the next five years.download full file at
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Entrepreneurial Finance
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Chapter 1 / Exercise 2
Entrepreneurial Finance
Leach/Melicher
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download full file at T.13. Best practices of high-growth, high-performance firms applied in the management practices area include “assembling a management team that is balanced in both functional area coverage and industry/market knowledge.”
14. Business opportunities, because they exist in real time, have a relatively narrow window of opportunity to become a successful business venture. However being the first to market does not guarantee success.
15. Ideas that are said to be “ahead of their time” are too early to become viable business opportunities for the inventor or innovator.
16. Once conceptualized, a new idea should be examined for its business feasibility.
17. A SWOT analysis is an examination of the strengths, weaknesses, opportunities, and threats to determine the business opportunity viability of an idea.

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