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978-1305968356 Chapter 1 Solution Manual
1 Chapter 1 INTRODUCTION TO FINANCE FOR ENTREPRENEURS FOCUS The purpose of this first chapter is to present an overview of what entrepreneurial finance is about. In doing so we hope to convey to you the importance of understanding and […]
978-1305968356 Chapter 10 Solution Manual Part 1
143 Chapter 10 VALUING EARLY-STAGE VENTURES FOCUS In this chapter, we introduce basic concepts of valuation, the process of estimating values. We consider the owner of a growing business who is beginning negotiations with a potential investor. We introduce the […]
978-1305968356 Chapter 10 Solution Manual Part 2
Chapter 10: Valuing Early-Stage Ventures 156 (2) What role, if any, does the $50,000 cash and the $81,900 sweat equity play in determining the post-financing ownership structure? Would the investor want less ownership if there had been two years of […]
978-1305968356 Chapter 11 Solution Manual
170 Chapter 11 VENTURE CAPITAL VALUATION METHODS FOCUS In this chapter, we present several variations on the simplified valuation procedures and rules of thumb frequently grouped under the designation “venture capital methods.” We introduce a three– scenario approach to examining […]
978-1305968356 Chapter 12 Solution Manual
207 Chapter 12 PROFESSIONAL VENTURE CAPITAL FOCUS In this chapter, we consider the highest profile segment of the venture investing markets: professional venture capital. We discuss the origins of venture capital and the periodic fluctuations accompanying major new technologies. We […]
978-1305968356 Chapter 13 Solution Manual
215 Chapter 13 OTHER FINANCING ALTERNATIVES FOCUS In this chapter, we consider a variety of government and private sources of new venture funding. We also consider financing traditionally available only to more mature ventures including commercial banking loans. LEARNING OBJECTIVES […]
978-1305968356 Chapter 14 Solution Manual Part 1
Chapter 14 SECURITY STRUCTURES AND DETERMINING ENTERPRISE VALUES FOCUS In this chapter, we discuss important concepts in structuring securities a venture uses to raise funds. We introduce the notion of primitive securities (like bonds and common stocks) and consider other […]
978-1305968356 Chapter 14 Solution Manual Part 2
Chapter 14: Security Structures and Determining Enterprise Values 196 2019) before settling down to a long-run growth rate of 7 percent annually. The cost of goods sold is expected to vary with sales. Operating expenses are expected to grow at […]
978-1305968356 Chapter 15 Solution Manual Part 1
223 Chapter 15 HARVESTING THE BUSINESS VENTURE INVESTMENT FOCUS This chapter in our entrepreneurial finance text focuses on how a successful entrepreneur can harvest or exit the venture. LEARNING OBJECTIVES 1. Plan an exit strategy. 2. Understand the meaning of […]
978-1305968356 Chapter 15 Solution Manual Part 2
Chapter 15: Harvesting the Business Venture Investment 236 Cash $50,000 $40,000 Accounts receivable 200,000 260,000 Inventories 450,000 500,000 Total current assets 700,000 800,000 Fixed assets, net 400,000 500,000 Total assets $1,100,000 $1,300,000 Accounts payable $130,000 $170,000 Accruals 50,000 70,000 Bank […]
978-1305968356 Chapter 16 Solution Manual
244 Chapter 16 FINANCIALLY TROUBLED VENTURES: TURNAROUND OPPORTUNITIES? FOCUS We direct attention in this chapter toward recognizing and managing financial distress. An inability to pay creditor obligations as they come due typically poses a major financial threat and certainly distracts […]
978-1305968356 Chapter 2 Solution Manual
17 Chapter 2 DEVELOPING THE BUSINESS IDEA FOCUS In this chapter we examine how one can move from an idea to a determination of the feasibility of the related business opportunity. We present an opportunity screening system to aid in […]
978-1305968356 Chapter 3 Solution Manual Part 1
35 CHAPTER 3 ORGANIZING AND FINANCING A NEW VENTURE FOCUS In this chapter, we focus on organizing the venture, obtaining and protecting intellectual property, and early stage financing. Although an entrepreneur can change the legal form of the venture in […]
978-1305968356 Chapter 3 Solution Manual Part 2
Chapter 3: Organizing and Financing A New Venture 47 Average Tax Rate = $550,369.05/$1,500,000 = 36.69% B. Taxed as a corporation. Corporate Marginal Taxable Income Over But not over Tax Rate Tax Payable 0 50,000 15.0% 7,500.00 50,000 75,000 25.0% […]
978-1305968356 Chapter 4 Solution Manual Part 1
56 Chapter 4 PREPARING AND USING FINANCIAL STATEMENTS FOCUS In this chapter, we introduce basic accounting and financial statements designed to help ventures monitor their progress. We stress the need to understand how cash is built and burned both in […]
978-1305968356 Chapter 4 Solution Manual Part 2
Chapter 4: Preparing and Using Financial Statements 67 Cash from Investing Activities: Increase in gross fixed assets –90 Net from Investing Activities –90 Cash from Financing Activities: Increase in bank loan 10 Increase in long-term debt 100 Cash dividends paid […]
978-1305968356 Chapter 5 Solution Manual Part 1
71 Chapter 5 EVALUATING OPERATING AND FINANCIAL PERFORMANCE FOCUS In this chapter, we focus on identifying and understanding the financial ratios used to evaluate the venture’s financial performance over time. Venture performance and efficiency is important to a variety of […]
978-1305968356 Chapter 5 Solution Manual Part 2
Chapter 5: Evaluating Operating and Financial Performance 83 Balance Sheet 2015 2016 Cash $50,000 $20,000 Accounts Receivables 200,000 280,000 Inventories 400,000 500,000 Total Current Assets 650,000 800,000 Gross Fixed Assets 450,000 540,000 Accumulated Depreciation -100,000 -140,000 Net Fixed Assets 350,000 […]
978-1305968356 Chapter 6 Solution Manual Part 1
89 Chapter 6 MANAGING CASH FLOW FOCUS In this chapter, we focus on short-term financial planning involving projecting monthly financial statements for one year or less. The availability of cash is what drives the entrepreneurial venture. Inadequate cash often constrains […]
978-1305968356 Chapter 6 Solution Manual Part 2
Chapter 6: Managing Cash Flow 105 2015 2016 Accounts payable 300 400 Bank loan 150 250 Accrued liabilities 100 150 Total current liabilities 550 800 Long-term debt 150 150 Common stock 850 1,100 Retained earnings 1,850 2,450 Total liabilities and […]
978-1305968356 Chapter 7 Solution Manual Part 1
119 Chapter 7 TYPES AND COSTS OF FINANCIAL CAPITAL FOCUS In this chapter, we characterize financial markets and focus on developing an understanding of the how one obtains and pays for financial capital. Without adequate capital, even the best ideas […]
978-1305968356 Chapter 7 Solution Manual Part 2
Chapter 7: Types and Costs of Financial Capital 130 Financing Dollar Interest Cost of Source Amount Rate Capital Kareem Construction is in the 30 percent average tax bracket. A. Calculate the after-tax (WACC) for Kareem. Total value (interest-bearing debt plus […]
978-1305968356 Chapter 8 Solution Manual
133 Chapter 8 SECURITIES LAW CONSIDERATIONS WHEN OBTAINING VENTURE FINANCING FOCUS In this chapter we introduce several major legal aspects of fundraising for the new venture. We discuss the central role of the Securities Act of 1933 and the exemptions […]
978-1305968356 Chapter 9 Solution Manual Part 1
Chapter 9: Projecting Financial Statements 1 Chapter 9 PROJECTING FINANCIAL STATEMENTS FOCUS In this chapter, we focus on projecting financial statements for several years into the future. Inadequate financial resources often constrains the venture’s ability to grow, is a primary […]
978-1305968356 Chapter 9 Solution Manual Part 2
Chapter 9: Projecting Financial Statements 13 6. [Multi-Year Financial Statement Projections] The Minoso Corporation anticipates a 20 percent increase in sales for 2017, 2018, and 2019. Minoso is currently operating at full capacity and thus expects to increase its investment […]
978-1305968356 DATAMETRIX INC Excel
DATAMETRIX, INC. [Enterprise Valuation Method] Ch 14, Prob 16 Actual Projected ——————————————>I Percent Sales Increase——> 30.0% 30.0% 30.0% 7.0% % of 2016 [Thousands of Dollars] Income Statements Sales 2016 2017 2018 2019 2020 Sales 100.0% 20000 26000 33800 43940 47016 […]
978-1305968356 Eco Products Capstone Case Excel
Eco-Products, Inc. Financial Statements and Projections Common-Size [In Dollars] Actual Actual Financial Statements Yearend Yearend [Percent of Revenues] Income Statements 2007 2008 2007 2008 Net Revenues 10,867,104 34,378,138 100.0% 100.0% Cost of Goods Sold 7,726,455 26,041,166 71.1% 75.7% Gross Profit […]
978-1305968356 Excel Artero Corporation Solution
Artero Corporation Solution Quarter Ch 6, Prob. 7 (In $ Thousands) Actual Projected Projected Projected Ending Income Statements Sept. 2017 Oct. Nov. Dec. Dec. 2017 Sales 700.0 1000.0 1500.0 3000.0 5500.0 Cost of Goods Sold (80% of Sales) -560.0 -800.0 […]
978-1305968356 Excel BIOMETRIX INC
BIOMETRIX, INC. [Equity Valuation Method] Actual I<———- Projected —————————->I Percent Sales Increase——> 20.0% 20.0% 20.0% 7.0% Chapter 10; Problem 8 % of 2016 Thousands of Dollars Income Statements Sales 2016 2017 2018 2019 2020 Sales 100.0% 20000 24000 28800 34560 […]
978-1305968356 Excel SOFTTEC PRODUCTS COMPANY
SOFTTEC PRODUCTS COMPANY Base Case Results [Parts A, B, C, D, & E]: Chapter 10 Mini Case Percent Change in Net Sales % of 33.3% 25.0% 20.0% 16.7% 7.0% [Thousands of Dollars] 2016 Actual Pro forma ——————————————– Income Statements Sales […]
978-1305968356 Excel SPATIAL
Income Statement 1993 1994 1995 1996 1996 1996 1997 1998 1999 2000 2001 SS SS+1 1997 1998 1999 2000 2001 SS SS+1 Growth (half year) (Projected) Ratios Pro Forma (percent of sales except Revenue which is growth rate Revenue Ratios […]
978-1305968356 GAMMA SYSTEMS MANUFACTURING CORPORATION Excel
GAMMA SYSTEMS MANUFACTURING CORPORATION CHAPTER 15 PROBLEMS 5-7: Balance Sheets 2015 2016 2017 2018 Check Year Cash 50,000 40,000 42,400 44,944 Accounts Receivables 200,000 260,000 275,600 292,136 Inventories 450,000 500,000 530,000 561,800 Total Current Assets 700,000 800,000 848,000 898,880 Fixed […]
978-1305968356 MINI CASE Excel
MINI CASE Pharma Biotech Corporation [$ Thousands] Sales Growth Rates 50% 80% Income Statements Actual Percent 2016 of Sales Forecast Basis 2017 2018 Net Sales 15000 100.00% (1+growth rate) x Sales 22500 40500 Operating Expenses -13000 86.67% .8667 x Forecast […]
978-1305968356 MINOSO CORPORATION Excel
MINOSO CORPORATION Financial Statement Projections Note: Projections are Prior to New Financing Decisions Ch 9, Prob 6 Sales Growth Rates—-–> 20% 20% 20% Income Statements Actual Percent Forecast Forecast Forecast 2016 of Sales Forecast Basis 2017 2018 2019 Net Sales […]
978-1305968356 PDC Company Projections Excel
Cash Budgeting Exercise PDC Company March April May June July Aug. Sept. Oct. Nov. Dec. Jan. Change Cash Flow [Spreadsheet Projections for Instructors] Schedule 1: Sales Forecast 92,000 115,000 184,000 138,000 115,000 92,000 80,000 100,000 130,000 160,000 100,000 Credit sales, […]
978-1305968356 PDC COMPANY VALUATION MODELS 1 Excel
In regards to using these spreadsheets: 1) Chapter 9’s valuations are contained in “PreMDM”, “PrePDM” and “PreDDA” where the proceeds of any offering are not placed on the initial balance sheet 2) Chapter 10’s Learning Supplement extensive example of a […]
978-1305968356 Product Case Solution Manual Part 1
CAPSTONE CASE 1: ECO-PRODUCTS, INC. End-of-Case Assignments: Suggested Discussions and Analyses A. Describe Eco-Products’ early history (1990 through 2003). Would you view the firm during that period as being a life-style business, an entrepreneurial venture, or? Why? Steve Savage and […]
978-1305968356 Product Case Solution Manual Part 2
Capstone Case 1: Eco-Products, Inc. 2008 forecast of $45 million was associated with a decline in economic activity J. Explain Eco-Products’ supply chain model that existed in early 2008. Describe the strengths and weaknesses of such a model from an […]
978-1305968356 Technology Case Solution Manual
272 CAPSTONE CASE 2: SPATIAL TECHNOLOGY, INC. End-of-Case Assignments: Suggested Discussions and Analyses A. Describe Spatial Technology’s “business model” in terms of revenues, profits, and cash flows. Spatial is the originator of a 3D modeling file format (SAT) and object […]
978-1305968356 Test Bank Chapter 1
1 CHAPTER 1 INTRODUCTION TO FINANCE FOR ENTREPRENEURS True-False Questions F. 1. Entrepreneurs provide the financing to individuals who think, reason, and act to convert ideas into commercial opportunities and create opportunities. opportunities and creating value. T. 3. An entrepreneur […]
978-1305968356 Test Bank Chapter 10
59 CHAPTER 10 VALUING EARLY-STAGE VENTURES True–False Questions risk and delay is called discounted cash flow (DCF). F. 2. The stepping stone year is the first year before the explicit forecast period. T. 3. The terminal or horizon value is […]
978-1305968356 Test Bank Chapter 11
67 CHAPTER 11 VENTURE CAPITAL VALUATION METHODS True–False Questions F. 1. The venture capital valuation method estimates the venture’s value by projecting both intermediate and terminal/exit flows to investors. flows or to find an acquirer for the venture. F. 3. […]
978-1305968356 Test Bank Chapter 12
78 CHAPTER 12 PROFESSIONAL VENTURE CAPITAL True–False Questions T. 1. In addition to having personal financial stakes in their portfolio of investments, professional venture capitalists have raised funds from other investors to invest in the portfolio. government foray into venture […]
978-1305968356 Test Bank Chapter 13
85 CHAPTER 13 OTHER FINANCING ALTERNATIVES True–False Questions T. 1. Despite the high risk and costs of using a facilitator or up–front fee solicitor to obtain financing, many start-ups never-the-less seek them as a source of funds due to the […]
978-1305968356 Test Bank Chapter 14
73 CHAPTER 14 SECURITY STRUCTURES AND DETERMINING ENTERPRISE VALUES True–False Questions F. 1. Preferred stock is the equity claim senior to common stock providing preference on dividends but not liquidation proceeds. dividends must be paid before any common stock dividend […]
978-1305968356 Test Bank Chapter 15
90 CHAPTER 15 HARVESTING THE BUSINESS VENTURE INVESTMENT True–False Questions T. 1. The process of exiting the privately held business venture to unlock the owners’ investment value is known as harvesting. the owners is known as a systematic liquidation. F. […]
978-1305968356 Test Bank Chapter 16
97 CHAPTER 16 FINANCIALLY TROUBLED VENTURES: TURNAROUND OPPORTUNITIES? True–False Questions the relevant financing and operating decisions faced are either restructuring or liquidating. T. 2. During the rapid growth stage of a venture’s life cycle, the relevant financing and operating decisions […]
978-1305968356 Test Bank Chapter 2
10 CHAPTER 2 DEVELOPING THE BUSINESS IDEA True-False Questions T. 1. For ventures that first get to market or create intellectual property rights, it’s common to price new products or services at high markups or profit margins. flows and also […]
978-1305968356 Test Bank Chapter 3
17 CHAPTER 3 ORGANIZING AND FINANCING A NEW VENTURE True-False Questions T. 1. The difference between a limited partnership and a general partnership is that the limited partnership has partners who actively manage the day-to-day operations but also has passive […]
978-1305968356 Test Bank Chapter 4
24 CHAPTER 4 PREPARING AND USING FINANCIAL STATEMENTS True-False Questions T. 1. Assets are financial and physical items controlled or owned by the business. F. 4. The practice of recording economic activity when realized is known as accrual accounting. T. […]
978-1305968356 Test Bank Chapter 5
31 CHAPTER 5 EVALUATING OPERATING AND FINANCIAL PERFORMANCE True-False Questions time, financial ratios are useful means of summarizing large amounts of financial data for comparative purposes. F. 2. Second-round, mezzanine, and liquidity-stage financing generally occur during a venture’s survival stage. […]
978-1305968356 Test Bank Chapter 6
38 CHAPTER 6 MANAGING CASH FLOW True-False Questions T. 1. The actions of screening business ideas, preparing a business model/plan, and obtaining seed financing occurs during a venture’s development stage. needs, and obtaining first-round financing occurs during a venture’s survival […]
978-1305968356 Test Bank Chapter 7
45 CHAPTER 7 TYPES AND COSTS OF FINANCIAL CAPITAL True-False Questions F. 1. The accounting emphasis on accrued revenue and expenses and depreciation is the same emphasis as that of finance managers. the required capital gains to complement dividends. However, […]
978-1305968356 Test Bank Chapter 8
52 CHAPTER 8 SECURITIES LAW CONSIDERATIONS WHEN OBTAINING VENTURE FINANCING True-False Questions T. 1. The securities Exchange act of 1934 provides for the regulation of securities exchanges and over–the-counter markets. excludes them from using some of the registration exemptions originating […]
978-1305968356 Test Bank Chapter 9
38 CHAPTER 9 PROJECTING FINANCIAL STATEMENTS True-False Questions F. 1. Long-term financial planning begins with a forecast of annual working capital needs. building value, obtaining additional financing, and examining exit opportunities. T. 3. Forecasting for firms with operating histories is […]
978-1305968356 WOK YOW IMPORTS INC Excel
WOK YOW IMPORTS, INC. Enterprise (Entity) Valuation Solution [Parts A through G]: Chapter 14 Mini Case Percent Change in Net Sales Percent Change in Net Sales % of 33.3% 25.0% 20.0% 16.7% 6.0% 33.3% 25.0% 20.0% 16.7% [Thousands of Dollars] […]