Loan applications require:

applicants to provide personal information that must be truthful

The profit margin on an item a company sells can best be defined as:

price of the unit minus unit cost of goods sold

One critical difference between bank loans and online loans is:

the amount of information the applicant must provide

A breakeven analysis can determine:

# units the company will need to sell to pay for a new piece of equipment

easier to obtain but more expensive than bank loans

A business plan has the following purpose:

describes how the company’s product will be differentiated vs competition

The maturity of a loan is:

the timeframe by which the borrower must repay the loan

To determine whether a business opportunity is realistic, the entrepreneur must:

determine how much capital is required to launch the business

The fixed costs of a business:

are the same no matter how many customers the business serves

The financial term liability refers to:

a debt or a loan a company must repay

What is a “registered agent?”

an individual responsible for receiving legal documents

is credit-worthy & responsible for repaying a loan if the debtholder cannot

Bank loan applications:

can be intimidating, complex and detailed

Total revenues minus total costs equals:

profits before owner compensation and taxes

When launching a business, which is NOT a critical consideration?

what type of bank account the company will use

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Most missed questions MicroEnterprise

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Questions 24

Answers

1
Loan applications require:
applicants to pay for the right to submit an application
applicants to offer a guarantee to take whatever loan terms are offered
completion all in one sitting
applicants to provide personal information that must be truthful
2
Which factors reduce the cost of borrowing from a bank?
available phantom assets
other outstanding loans
a guarantor
an outstanding mortgage
3
The profit margin on an item a company sells can best be defined as:
price of the unit minus unit cost of goods sold
total company revenue minus total company costs
variable cost per unit
total debt minus annual debt payment
4
An example of a variable cost is:
monthly rent
overhead salaries
the salary of the Finance Vice President
cost of goods sold
5
Revenue per unit minus cost of goods sold equals:
contribution margin
income pro forma
debt service
unit breakeven
6
An example of a fixed cost is:
office supplies
monthly rent
hourly labor
cost of goods sold
7
Read:
bank credit
online credit
mortgage
none - this would not be a profitable venture
8
One critical difference between bank loans and online loans is:
the amount of money the applicant can request
none – they are pretty much the same
applicants only have to be completely truthful on a bank loan application
the amount of information the applicant must provide
9
A breakeven analysis can determine:
when a company must pay its bills to avoid bankruptcy
# units the company will need to sell to pay for a new piece of equipment
the identity of future loan guarantors
# customers business will need to meet its revenue projections
10
Online loans are:
easier to obtain and about the same cost as a bank loan
only available to companies in a limited number of industries
easier to obtain and less expensive than bank loans
easier to obtain but more expensive than bank loans
11
A business plan has the following purpose:
serves as collateral that will secure guaranteed loans
describes in detail how the company will set up its headquarters office
serves as a required filing with the Internal Revenue Service
describes how the company’s product will be differentiated vs competition
12
The maturity of a loan is:
the timeframe by which the borrower must repay the loan
the interest rate on the loan
the balance of an outstanding loan
how long it takes to receive loan approval from the bank
13
Compared to a bank loan, an online loan is:
only for companies in certain industries
much easier to obtain
less expensive (lower interest rate)
approximately equal in terms of interest rates
14
To determine whether a business opportunity is realistic, the entrepreneur must:
determine how the company will advertise
determine how much capital is required to launch the business
determine the corporate officers of the competitors
determine the color scheme of the company’s proposed logo
15
The fixed costs of a business:
are the same no matter how many customers the business serves
must be different each month
include the cost of production materials
must exceed variable costs
16
The financial term liability refers to:
the ability of the company to secure loans
a debt or a loan a company must repay
a weakness in the company’s financial structure
the ability of the company to raise funds
17
A payment made to an insurance company to cover the costs of an insurance policy is called:
a dividend
a premium
a beneficiary
a policy
18
What is a “registered agent?”
an advertising agency representative
an individual responsible for receiving legal documents
an officer of the court
a government official
19
A guarantor:
must be a business or individual located in-state
is credit-worthy & responsible for repaying a loan if the debtholder cannot
has limited liquidity
assumes no legal responsibilities
20
Bank loan applications:
are short
can only be completed with a banker during regular business hours
are easy to complete
can be intimidating, complex and detailed
21
The government agency that enables companies to register to do business in the state of Louisiana is:
Secretary of State
Department of Commercial Licenses
Workforce Commission
Internal Revenue Service
22
Total revenues minus total costs equals:
contribution margin
unit breakeven
profits before owner compensation and taxes
future value profits
23
A company balance sheet is the single report that best indicates:
company assets and liabilities
monthly debt payments and outstanding debt obligations
company quarterly cash flow
company financial projections
24
When launching a business, which is NOT a critical consideration?
physical or virtual location
what type of bank account the company will use
how the new company’s product is different/better than competitor products
identifying team members with important skills the new business can hire

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