Word Definition
What is "Depreciation"
A noncash charge the firm takes for the general wear and tear on its capital goods
Glossary: Gradual wear on capital goods
Why is Depreciation called a noncash charge?
Because the money stay in the firm rather than being paid to someone else.
How many different mergers are there and what are their names?
There are 2 types of mergers, horizontal mergers, and vertical mergers,
What kind of investors like to fund the start-ups of family friends, or others whose business ideas have potential, but couldn't obtain enough seed money?
Angel investors
All businesses, whether a proprietorship start-up or a corporation need to consider what?
Need to consider location
What is "Merger"?
A combination of two or more businesses to form a single firm.
Glossary: Combination of two or more business enterprises to form a single firm.
How do most businesses keep track of their business?
By using financial statements
What is one of the main reasons for conglomerate mergers?
Diversification, aiming to reduce risk by spreading investments across multiple industries and markets.
The problem with starting a new business isn't just about having a good idea, instead it is often what?
It is often about having enough funding and managerial ability.
Why is the availability and cost of labor one important site factor?
Because without workers a factory cannot operate.
What is "Horizontal Merger"?
When firms that produce the same kind of product join forces.
Glossary: Combination of firms producing the same kind of product.
What happens when cash flow are reinvested in a business?
The firm can produce new or additional products.
Why are multinationals usually welcomed in a nation?
Because they transfer new technologies and generate new jobs in areas where jobs are needed.
One of the newest ways for an entrepreneur to secure financing is through what?
Crowdfunding, also known as crowdsourcing, making a direct funding appeal to a "crowd" of possibly interested investors on a social networking platform.
Why is steel a bulk-losing industry?
Because a sound business model would not pay to transport tons of ore that contained a small portion iron to a smelter where the ore is refined.
What is "Net-Income"?
The funds left over after all of the firms expenses.
Glossary: Measure of business profits determined by subtracting all expenses, including taxes, from revenues.
What can income statement be used to show?
Income statements can be used to show how a business can use some of the revenues it receives from sales to grow through investments
A corporation may become so large through mergers and acquisitions that turns it into a what?
It turns into a conglomerate, a firm that typically has at least four businesses, each making unrelated products, none of which are responsible for a majority of its sales.
Many states and universities have begun to promote what?
They began to promote start-up incubators, a place where potential entrepreneurs can get training and skill development to give life to a business concept.
What would be the best location for entrepreneurs who want to set up a candy shop?
Best location would be on a busy pedestrian street or in a busy shopping mall due to foot traffic from the people that happened to walk by.
What are "Incubators"?
A place where potential entrepreneurs can get training in accounting, engineering, and managerial skills, along with potential financing, to give life to a business concept.
Glossary: Places where entrepreneurs can receive the training and other assistance to build a successful start-up business.
If investors want to know about the financial health of a firm, what is the first thing they look for?
A positive cash flow.
Why are multinational corporations important?
They are important because they have the ability to move resources, goods, services, and financial capital across national borders.
What are the names of the three different ways businesses can find start-up funds?
Venture Capitalists, Angel Investors, and Crowdfunding.
The best and worst situation factors will vary depending on what?
Depending on the product being made and the raw material used to make it.