Which of the Following Is Least Likely to Explain Why

question 113

Multiple Choice

Which of the following is least likely to explain why entrepreneurs contribute their personal funds to start-up projects? Their contribution:

• A) acts as a signal to venture capitalists.
• B) repays debt held by the venture capitalist.
• C) retains a portion of the firm's equity.
• D) provides incentive to expend effort.

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Definitions:

Cash Balance

A measure of the amount of cash that a company, or an individual, has on hand at any given time.

Short-Term Loan

A loan scheduled to be repaid in less than a year, often used for immediate cash flow needs.

Annual Net Cash Inflow

The total amount of cash that a business generates in a year, after all expenses and taxes are subtracted from total cash inflows.

Accounts Payable Balance

The total amount of money owed by a company to its creditors or suppliers at a specific point in time.