Sources of Business Finance
7 months ago
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14 QuestionsShow answers
  • Question 1
    30 seconds
    Q.

    This is the cash that is generated by the business when it operates successfully

    answer choices

    Retained profits

    Share capital

    Angel investor

    Owner savings

  • Question 2
    30 seconds
    Q.

    Which of the statements about retained profits is false?

    answer choices

    You have unlimited amounts of money available

    Shareholders and employees could be frustrated because there is less profit to be 'shared out'

    You do not have to pay interest

    You are free to use it for any purpose

  • Question 3
    30 seconds
    Q.

    Which of the following is NOT usually considered a personal source of finance.

    answer choices

    Savings

    Redundancy payments

    Crowdfunding

    Credit card

  • Question 4
    30 seconds
    Q.

    Which of the following statements about personal sources of finance is false?

    answer choices

    Often cheaper in the long-term

    Less 'red tape' or delay in getting the cash

    Less personal financial risk for the entrepreneur

    May be harder to raise large amounts

  • Question 5
    30 seconds
    Q.

    An amount of money that is paid back within an agreed amount of time, with interest

    answer choices

    Bank loan

    Angel investment

    Overdraft

    Retained profit

  • Question 6
    30 seconds
    Q.

    Which of the following statements about bank loans is not true?

    answer choices

    Usually used for large amounts of money that need to be paid back over a longer time-frame

    Interest rates make the loan more expensive

    Easy to get

    Usually cheaper than consistently using a bank overdraft

  • Question 7
    30 seconds
    Q.

    A short-term source of finance from a bank that usually is only used in an emergency/when needed

    answer choices

    Overdraft

    Loan

    Share capital

    Credit card

  • Question 8
    30 seconds
    Q.

    Which of the following statements about overdrafts is not true?

    answer choices

    Short term source of finance

    It's really a small, short term loan

    It's flexible, in that it can be used whenever it is needed

    Cheap - the interest rate is usually lower than that of a long-term bank loan

  • Question 9
    30 seconds
    Q.

    Wealthy individuals who invest in high-potential businesses are...

    answer choices

    Banks

    Angel Investors

    Shareholders

    Crowdfunders

  • Question 10
    30 seconds
    Q.

    What do Angel Investors and Crowdfunders have in common?

    answer choices

    They require something in return for their investment

    They charge interest on money invested in the buisness

    They become part-owners of the business

    They are incredibly wealthy

  • Question 11
    30 seconds
    Q.

    Case study: Apple plans to develop a prototype for an iPhones with a flexible display. Which of the following sources of finance would be most appropriate?

    answer choices

    Retained profits

    Selling shares

    Crowdfunding

    Bank loan

  • Question 12
    30 seconds
    Q.

    Case study: the Business Incubator team 'TradeTools' - an online platform connecting neighbors who want to rent tools with neighbours that own them. They will pitch their business concept in May - what would be the most appropriate source of finance for this new, untested idea?

    answer choices

    Angel Investor

    Bank loan

    Personal savings

    Credit cards

  • Question 13
    30 seconds
    Q.

    Case study: after years of success and growth, Shark Tank success story Lumibowl (a clip-on light that illuminates your toilet bowl so you 'hit your target' in dark of night!) is ready to grow extensively into other countries. It needs huge amounts of money in order to do so. Which source of finance would be a good fit?

    answer choices

    Raising share capital by transforming from a partnership to a public corporation

    Taking advantage of the agreed overdraft with the bank

    Retained profits of $80,000

    Crowdfunding

  • Question 14
    30 seconds
    Q.

    True or false - crowdfunding is usually only used for new business start-ups/concepts and is therefore inappropriate for existing large, profitable businesses

    answer choices

    True

    False

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