Chapter 9: Buying an Existing Business

Someone legally appointed to sell off the assets of a bankrupt firm is called
1. an auctioneer
2. a liquidator
3. a terminator
4. a management consultant
Someone legally appointed to resolve the financial difficulties of an insolvent firm is called
1. an administrator
2. a predator
3. an auditor
4. a turnaround consultant
In business transactions, a BIMBO refers to
1. a ‘white elephant’
2. a young buyer
3. a management buy-in
4. a management buy-out
5. a buy-in management buy-out
In the list below, there are four types of tangible assets in a business and one type of intangible asset. Which is the intangible asset?
1. property
2. fixtures and fittings
3. equipment
4. goodwill
5. stock
In the list below, there are four types of potential liabilities in a business, and one type of potential asset. Which is the potential asset?
1. creditors
2. intellectual property
3. tax
4. bank loan
5. hire purchase agreement
Goodwill in a business includes several factures. Which of the list below is not a potential contributor to goodwill?
1. reputation
2. customer base
3. personal loans
4. skill base
There is more than one way to value a business. Which of the list below is not commonly used?
1. market value of the assets
2. wealth of the owner
3. multiple of profits
Of the three business types listed below, two are more likely to be asset-rich one is likely to be asset-poor? Which one is likely to be asset- poor?
1. training consultancy
2. agricultural smallholding
3. manufacturing firm
‘Gearing’ measures the percentage of borrowing compared to what?
1. percentage of debt
2. percentage of assets
3. percentage of long term finance
4. number of company vehicles
The list below gives three possible advantages of buying a business and one potential disadvantage. Which is the potential disadvantage?
1. overcomes barriers to entry
2. not all my own work
3. track record
4. buys market share

Chapter 9: Buying an Existing Business

Quiz