Question

1. using the ____ method of evaluating the firm, cash flow is adjusted for the time value of money.

A ) replacement value

b) present value of future cash flow

c) earning approach

d) book value.

2. the most effective use of the interim _____ is to establish cost standards and compare the actual amount with the budget amount for the time period a) inventory analysis b)income statements c) balance sheets)cash flow statements

a) inventory analysis

b) income statement

c) balance sheet

d) cash flow statment

3. the penetration growth strategy

a) focuses on develping new product fo the exicting market

b) relise on taking market share from companies

c)expands the firms product offering with complementary products

d)aims to take new product into new market

4. crowdfunding brings together various individuals who commit money to project and companies they want ti support True/False

5. early stage financing is typically

a)called seed or startuo capital

b)used as working capital to support int=itial growth

c) where venture capitalists are highly involved

d) easier to obtain thain expansion financing.

Answer 1

1. Answer: B (Present value of future cash flow)

Rationale: Present value is the current value of a future sum of money or cash flows given a specific rate of return. The time value of money (TVM) is a concept that money you have now is worth greater than the similar sum in the future due to its earning capacity.

2. Answer: D (Cash flow statement)

Rationale: A cash flow statement is financial statement that shows how changes in income and balance sheet accounts affect cash and its cash equivalents, and breaks the analysis down to operating, investing, and financing tasks and is used to calculate budget variance and establish cost standards.

3. Answer: B (Relies on taking market share from companies)

Rationale: The penetration growth strategy focuses on targeting existing products in existing markets in order to increase sales within its present market and gain market share.

4. Answer: TRUE

Rationale: Crowdfunding is the method of funding a venture or a project by raising small amounts of money from a larger number of individuals.

5. Answer: A (Called seed or startup capital)

Rationale: An organization that is first starting business may have only limited access to funding and other sources. Many startup executives often turn to known people for initial investments—family and friends and this financing is referred to as seed capital or early stage financing.