This is the cash that is generated by the business when it operates successfully
  • Retained profits
  • Share capital
  • Angel investor
  • Owner savings
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
Which of the following is NOT usually considered a personal source of finance.
  • Savings
  • Redundancy payments
  • Crowdfunding
  • Credit card
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
An amount of money that is paid back within an agreed amount of time, with interest
  • Bank loan
  • Angel investment
  • Overdraft
  • Retained profit
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
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
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
Wealthy individuals who invest in high-potential businesses are...
  • Banks
  • Angel Investors
  • Shareholders
  • Crowdfunders
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
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
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
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
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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