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Financing Small Business(Entr 431) Question Paper

Financing Small Business(Entr 431) 

Course:Business Administration

Institution: Kenya Methodist University question papers

Exam Year:2011



TIME : 2 HOURS
INSTRUCTIONS Answer Question ONE and any Other TWO Questions
Question 1
a) Discuss the major problems encountered by entrepreneurs as they raise funds for start-ups. (10marks)
b) Identify any THREE conflicting goals in an enterprise and propose solutions. (10marks)
c) Jesses has a limited Company and would like to capital through debt financing what requirements should the company meet before proceeding. (10marks)

Question 2
a) What factors do financial institutions consider before lending to small enterprises? (10marks)
b) Explain the importance of the following to entrepreneur.
i) Break even point
ii) Profitability ratio
iii) Liquidity ratio
iv) Cash flow analysis
v) Balance sheet. (10marks)

Question 3
a) Why has the grameen model bank been replicated much in Kenya? (10marks)
b) Explain any TWO investment appraisal methods applied by entrepreneurs in Kenya, and highlight their importance. (10marks)

Question 4
a) Discuss the risks associated with financing small enterprises. (10marks)
b) Define the term venture capital and explain what entrepreneurs should consider when evaluating venture capitalist. (10marks)

Question 5
a) What is the contribution of the government is relation to financing small enterprises? (10marks)
b) How can an entrepreneur prepare for succession in order to avoid financial crisis? (10marks)






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