Assignment

• 3 Secrets to Innovation - http://www.inc.com/lauren-leader-chiv%C3%83%C2%A9e/3-secrets-of-innovation-that-everyone-misses.html

1. What types of projects or assets are funded in the capital budgeting process? What are the two forms of long term funding used by businesses for the capital budgeting process? List each type of funding, define it and list one advantage and disadvantage for each form.

2. The video Innovation-Why, noted innovation can lead to competitive advantage for a business in three ways. What are those three ways and briefly describe each?

3. Investing in a start-up company is considered more risky than investing in an established company like Nike or Toyota. Why is this? Since investing in a startup is more risky an investor would expect a greater what?

4. Heidi and Haruki are starting a business together and have asked your advice about types of financing available to startups. List the five sources of possible funding discussed in lecture and briefly describe each.

5. The three secrets from "3 Secrets of Innovation That Everyone Misses" were diversity, leadership style, and listening. A) What is meant by diversity? B) What leadership style is best for innovation? C) How does listening improve innovation?

6. Why did Blake Mycoskie - founder of Tom's Shoes - choose to form a business as opposed to a charity or non-profit organization? What type of entrepreneurship was Blake engaged in?

7. Ernesto and Janelle own a printing company and were asked to extend credit to a potential customer. In evaluating the client's credit worthiness, they chose to look at the current ratio and debt to total assets ratio. Explain how these two ratios would help them make a decision about whether to extend credit to the potential customer.

8. The lean startup model seeks to get a product in front of customers as soon as possible (the Minimum Viable Product), why? What advantages did the lean startup video mention?

9. In lecture we discussed three ways to test a business idea - all of which vary in the level of detail and thoroughness. List the three from least detailed to most detailed.

10. What are the three major financial statements? List each statement and then for each statement:

a) Explain what each reports or measures
b) List the3 main accounts for each
c) Indicate whether the statement reports for an accounting period or a point in time.

11. What is a stakeholder? Think of a company, organization, or institution you have been a part of (other than Oregon State University). State the name of the organization and briefly describe your relationship to it. Then list two internal and two external stakeholders of the organization.

12. Pick one of the two scenarios below (A or B) and state which business type you would choose of the five we discussed in class and online (e.g. sole proprietorship, partnership, etc.) and give the REASON you would choose it.