Chapter 7: Financial Concepts and Tools

Fixed cost is a cost that __________ no matter how much is produced.

• changes

• does not change

A variable cost is a cost that _______ based on production.

• changes

• does not change

Which of the following would be an example of a fixed cost on a farm? (choose all that apply)

• Mortgage on the land

• Cost of seed

• Fuel to operate machinery

• Fertilizer

Which of the following would be an example of a variable cost on a farm? (choose all that apply)

• Mortgage on the land

• Cost of seed

• Fuel to operate machinery

• Fertilizer

Organize these options into the right categories

Groups:

(a) Debt Financing

,

(b) Equity Financing

,

(c) Can be Both

• Lines of Credit

• Invoice Financing

• Bootstrapping

• Angel Investors

• Small Business Loan

• Venture Capitalists

• Debt Crowdfunding

• Equity Crowdfunding

You decide to start a business with only your personal resources, such as personal savings. This is called:

• Barefooting

• Bootstrapping

• Shoelacing

• Straightlacing

One common method of financing a start-up business is to sell shares of ownership in the business, called ____________ _______________.

• Debt Financing

• Representative Taxation

• Stimulus Spending

• Equity Financing

When an entrepreneur takes out loans to finance their business, this is called...

• equity financing

• bootstrapping

• debt financing

• preferred stock

Methods of funding new business ideas and products that rely on receiving small contributions from many supporters

• Crowdsurfing

• Crowdsourcing

• Crowdfunding

• Couchsurfing

When an entrepreneur takes out loans to finance their business, this is called...

• equity financing

• bootstrapping

• debt financing

• preferred stock