1. What does the term key performance indicators (KPI) represent? A. The fact that specific financial results may be important for firms in a specific industry, but different ones may matter for firms in other industries B. None of these C. The measures of performance that, depending on their values, will help a firm achieve a competitive advantage D. Those things that any business in any industry must pay attention to in order to have better performance than rivals. QUESTION 3 1. Which of the following is true of credit unions? A. They only loan money to people interested in starting a business who are members of the credit union. B. None of these C. They are more willing than commercial banks to issue small loans to businesses D. All of these E. There is a federal limit on the total amount (as a % of assets) credit unions can lend QUESTION 4 1. What is the most important difference between current assets and fixed assets? A. Current assets are much more important to a business than fixed assets. B. Current assets can be converted to cash much more quickly than fixed assets. C. Current Assets are listed first on a balance sheet, followed by fixed assets D. The value of current assets changes much more often than the value of fixed assets.. QUESTION 5 1. Which type of businesses would most benefit from creating a "customer profitability" map? A. A business that sells IT products & services to professional businesses (like lawyers, doctors and dentists). B. A restaurant C. A retail clothing store D. B&C only QUESTION 6 1. Which of the following is likely to have the largest influence on how easily a business may obtain funding? A. Number of firms in the industry B. Age of the entrepreneur C. Age of business D. None of these QUESTION 7 1. Which of the following is true of loan brokers? A. Fees for loan brokers typically exceed 2.5% of the amount being borrowed by the small business. B. They typically evaluate a business's need for borrowing and its option without charging a fee. C. They take a fee even if they are unable to secure a loan for a small business. D. All of these. None of these. QUESTION 8 1. Which of the following illustrate the nature of the "balance" that balance sheets depict? A. Current Assets=Current Liabilities B. Total Assets=Total Liabilities+Shareholders' Equity C. Debt=Equity D. Total Assets=Total Liabilities QUESTION 9 1. If net sales for a small business are $200,000/year and cost of goods is 45% of sales and operating expenses are 30% of sales, which of the following represents the operating profit of the firm? A. $77,000 B. $40,000 C. $50,000 D. The answer cannot be calculated without more information.

QUESTION 11 1. Why is it necessary for start-up companies to have a reserve of cash on hand? A. Start-up companies are always looking for a competitive advantage and having a cash reserve helps it develop one. B. Start-up companies are small and expenses are higher as a percent of their sales revenue compared to firms that are older. A cash reserve helps the start-up afford these higher costs. C. Start-up companies typically do not make a profit in early years. A cash reserve helps ensure that the firm can pay its creditors, even when it does not make a profit. D. Start-up companies often have expenses that arise unexpectedly which a cash reserve permits them to pay for.