Review and Answer Questions

User Generated

Obreobry

Business Finance

Webster University

Description

Site: Pearson Collections
Section or Module: ENTR 5000 Entrepreneurship Process for Freeman at WU
Expiration Date: Feb 20, 2020

In the Textbook:

  • Chapter 6: Financial Statements
  • Chapter 7: Profit, Profitability, and Break-Even Analysis
  • Chapter 8: Forecasting and Pro Forma Financial Statements | Slides
  • Chapter 9: Getting Financing or Funding | Slides


Question 1.

Financial Management, Planning and Analysis

Complete the following Review and Discussion Questions (four total) from each of the textbook sections indicated.

Chapter 6, Financial Statements, p. 234

2. Compare variable and fixed expenses.

6. What is the difference between between the time periods listed on an income statement and on a balance sheet?

Chapter 7, Profit, Profitability, and Break-Even Analysis, p. 263

10. The Handy Doll Manufacturing Company has the following information: The average doll sales price is $12, raw materials for a doll are $4, and it takes 15 minutes to assemble a doll. Production labor is paid $8 per hour. Operating expenses are as follows: salaries, $2,500 per week; insurance, $1,200 per quarter; rent, $1,500 per month; and utilities, $800 per month. How many dolls must be sold per month to break-even? How many dollars in sales does this represent? What is the contribution margin for each doll sold?

Chapter 8, Forecasting and Pro Forma Financial Statements, p. 309

8. What role does the pro forma cash budget play in financial forecasting (Table 8)?


Question 2.

Financing and Funding

Complete the following Review Questions (five total) on pages 357-358 of Chapter 9, Getting Financing or Funding in your textbook.

1. What are the three most common reasons most entrepreneurial ventures need to raise money in their early life?

5. What is bootstrapping? Provide several examples of how entrepreneurs bootstrap to raise money or cut costs. In your judgement, how important is the art of bootstrapping for for an entrepreneurial venture?

8. What are the most common sources of equity funding?

9. Describe the most common sources of debt financing.

18. In general, why are commercial banks reluctant to loan money to start-ups?

Explanation & Answer:
2 Questions
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Explanation & Answer

Attached.

SURNAME1
Questions
Institutional affiliation
Date
Question 1.
Financial Management, Planning, and Analysis
Question 2. Compare variable and fixed expenses
Variable costs are the costs associated with the amount of goods and services produced, while
fixed expenses remain the same irrespective of the production volume. In other words, variable
costs vary with the production volume, while the fixed cost remains the same even when the
production volume is high or low.
Question 6. income statement and balance sheet
Periods on income statement shows how a company has been performing on a given period,
while on balance sheet it shows assets and liabilities at...


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