Question 1

Many Canadians believe that Ontarians pay the highest HST rates in Canada,however,which of the following provinces actually pay more than those living in the province of Ontario?

Accepted Answer

Nova Scotia has a higher HST rate than Ontario, with a rate of 15% compared to Ontario's 13%.

Question 2

_______ is an organization run almost entirely by students whose purpose is to get students to build startups.

Accepted Answer

TheFounderProject is an organization run almost entirely by students whose purpose is to get students to build startups. Indiegogo and Kickstarter are crowdfunding platforms for startups and Idea Cafe is a website that provides resources for small business owners.

Question 3

Describe some of the advantages of financing company activities with equity.

Accepted Answer

The answer of Describe some of the advantages of financing...

Question 4

Describe the profile of the typical angel investor.

Accepted Answer

The answer of Describe the profile of the typical angel...

Question 5

Describe the advantages of using debt to raise money for capital expenditures.

Accepted Answer

The answer of Describe the advantages of using debt to...

Question 6

The interest that a company pays to its bondholders is tax deductible.

Accepted Answer

The interest paid to bondholders is considered a business expense and is therefore tax deductible.

Question 7

Bank loans,both operating and term loans,are demand loans so that regardless of the term,the bank can and will demand they be paid back if it feels the company is getting into trouble.

Accepted Answer

Bank loans, both operating and term loans, are demand loans, which means that the bank can demand repayment at any time if it feels the company is in financial trouble.

Question 8

What are the 5 C's of Credit?

Accepted Answer

The answer of What are the 5 C's of Credit?...

Question 9

As of April 1,2013,the HST rate in Ontario is:

Accepted Answer

As of April 1, 2013, the HST (Harmonized Sales Tax) rate in Ontario is 13%. This is a single tax charged on the combined federal and provincial rates on most goods and services consumed or purchased within the province. Options A, B, and D are incorrect as they do not match the current HST rate in Ontario.

Question 10

The problem with using debt to finance business activities is that it can be difficult to service and a burden on your cash flows.

Accepted Answer

Using debt to finance business activities can increase the financial risk and be difficult to repay, leading to a burden on the cash flows of the business.

Question 11

Providers of equity capital do not expect to receive interest payments but rather hope to share in the future profits of the business.

Accepted Answer

Providers of equity capital, such as shareholders, invest in a company with the hope of future profits and capital appreciation, rather than receiving interest payments like providers of debt capital (such as bondholders).

Question 12

Equity funding is money supplied by a financial institution in exchange for periodic interest payments and a promise to repay the principal at a specified maturity date.

Accepted Answer

Equity funding is actually a type of financing where an investor provides capital in exchange for ownership in the company, without any promise of repayment of the principal. The investor may receive periodic dividends or share in the profits of the company, but there is no obligation to repay the initial investment.

Question 13

How can an IPO be used as an exit strategy?

Accepted Answer

The answer of How can an IPO be used as...

Question 14

What is meant by working capital?

Accepted Answer

The answer of What is meant by working capital?...

Question 15

High-risk ventures are more likely to secure debt financing than equity financing.

Accepted Answer

High-risk ventures are less likely to secure debt financing because lenders are less willing to take on the risk of such ventures. Equity financing, on the other hand, allows investors to share in the risk and potential reward of the venture. Therefore, high-risk ventures are more likely to secure equity financing than debt financing.

Question 16

Explain the concept of "bootstrapping".

Accepted Answer

The answer of Explain the concept of "bootstrapping"....

Question 17

_______ is a crowdfunding site where you put together a project and look for funding.If the project succeeds in reaching its funding goal,all backers' credit cards are charged.If the project falls short,no one is charged.

Accepted Answer

Kickstarter is the most well-known crowdfunding site that follows the described funding model.

Question 18

In Canada,it is not mandatory for a small business to open an HST or GST account until their revenues reach:

Accepted Answer

According to the Canada Revenue Agency, a small business is not required to register for an HST/GST account until their revenues reach $30,000 in a calendar year. Therefore, the best choice is C.

Question 19

The most common source of equity financing for startup businesses is from venture capitalists.

Accepted Answer

The most common source of equity financing for startup businesses is actually from the founder's personal savings, followed by friends and family, angel investors, and then venture capitalists. However, venture capitalists are a popular source of equity financing for high-growth startups that have the potential for significant returns.

Question 20

It is estimated that between 75 and 85 percent of new startups use some form of bootstrapping to help finance themselves.

Accepted Answer

Studies have shown that the majority of startups (between 75 and 85 percent) use some form of bootstrapping to finance themselves.

Quiz 7: Market Feasibility Study