True-False Questions

____ _______1. Entrepreneurs provide the financing to individuals who think, reason, and act to convert ideas into commercial opportunities and create opportunities.

____ 2. Small businesses, those with less than 500 employees, represent over 99 percent of all employers, and account for about one-half of the gross domestic product in the United States.

____ ______3. Small and growing enterprises are critical to the U.S. economy; small firms provide 20 to 30 percent of net new jobs.

____ 4. Nearly half of business failures are due to economic factors such as inadequate sales, insufficient profits, and industry weakness.

____ 5. The time value of money is an important component of the rent one pays for using someone elses financial capital.

____ 6. A ventures financial objective is to survive.

____ 7. Private financial markets are a place where standardized contracts or securities are traded on organized security exchanges with restrictions on how they can be transferred.

____ 8. Free cash flow is the net income forecast to be available to the ventures owners over time.

____ 9. Free cash flows are adjusted for risk and the time value of money when used to calculate the value of a venture.

____ 10. Owner-manager (agency) conflicts are differences between managers self-interest and that of the owners who hired the manager.