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- 1. Multiple Choice
This is the cash that is generated by the business when it operates successfully
Retained profits
Share capital
Angel investor
Owner savings
- 2. Multiple Choice
Which of the statements about retained profits is false?
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
- 3. Multiple Choice
Which of the following is NOT usually considered a personal source of finance.
Savings
Redundancy payments
Crowdfunding
Credit card
- 4. Multiple Choice
Which of the following statements about personal sources of finance is false?
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
- 5. Multiple Choice
An amount of money that is paid back within an agreed amount of time, with interest
Bank loan
Angel investment
Overdraft
Retained profit
- 6. Multiple Choice
Which of the following statements about bank loans is not true?
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
- 7. Multiple Choice
A short-term source of finance from a bank that usually is only used in an emergency/when needed
Overdraft
Loan
Share capital
Credit card
- 8. Multiple Choice
Which of the following statements about overdrafts is not true?
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
- 9. Multiple Choice
Wealthy individuals who invest in high-potential businesses are...
Banks
Angel Investors
Shareholders
Crowdfunders
- 10. Multiple Choice
What do Angel Investors and Crowdfunders have in common?
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
- 11. Multiple Choice
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?
Retained profits
Selling shares
Crowdfunding
Bank loan
- 12. Multiple Choice
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?
Angel Investor
Bank loan
Personal savings
Credit cards
- 13. Multiple Choice
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?
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
- 14. Multiple Choice
True or false - crowdfunding is usually only used for new business start-ups/concepts and is therefore inappropriate for existing large, profitable businesses
True
False
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