CEPA Exam Prep & CE with Complete Solutions
"Do you want to keep growing or do you want to shift focus to exiting?" is an example of
a question owners should ask themselves
every ______.
A) Week
B) Month
C) 90 Days
D) 120 Days - ANSWER-C) 90 Days
4 area business owner can NOT control - ANSWER-Taxes
Time Horizon
Inflation
Rate of Return
5. When it comes to estate planning and exit planning, who do you include?
A) The owner of the company
B) The owner's spouse
C) The owner's adult children
D) The owner's children's spouses
E) All of the above - ANSWER-E) All of the above
7 Value Domains - ANSWER-Culture
Risk
Strategy
Productivity
Sales & Marketing
Financial
Leadership & People
80% of all ESOPs are in companies with less than ____ employees.
A) 10
B) 30
C) 300
D) 1000 - ANSWER-C) 300
A _____ gift is one in which the person who received the gift has the unrestricted right
to the immediate possession and use of it.
A) IRA gift
B) ILIT gift
C) Present interest gift
D) Future interest gift - ANSWER-C) Present interest gift
,A ________ buyer may consider purchasing a company in order to enter a new market
or obtain new intellectual property.
A) Hypothetical buyer
B) Financial buyer
C) Strategic buyer
D) Family buyer - ANSWER-C) Strategic buyer
A business attractiveness score of 67% Is considered:
A) Average
B) Below average
C) Above average
D) Inaccurate - ANSWER-C) Above average
A business owner you are advising on exit options does not have a family member or
children to transfer the business to. She would
like the exit option that will get her the highest price for the business, more cash up
front, and will allow her to walk away faster. What
option do you recommend?
A) Sale to existing partners
B) Recapitalization
C) Sale to third party
D) Management buy-out - ANSWER-C) Sale to third party
A business's Range of Value (ROV) multiple is determined by ____ .
A) The business owner
B) The private capital market
C) The business's client base
D) The IRS - ANSWER-B) The private capital market
A client's 3-5 year inspirational vision should be revisited:
A) Every week
B) Every month
C) Every 90 days
D) Every year - ANSWER-C) Every 90 days
A Confidential Information Memorandum (CIM) serves as a:
A) Preliminary due diligence document
B) Sales document
C) Communication of opportunities and weaknesses
D) All of the above - ANSWER-D) All of the above
,A family enterprise can best be described as a ____ .
A) System
B) Process
C) Hassel
D) War - ANSWER-A) System
A father owns his business 100%. He has been married 35 years to the mother of his
three children. The oldest child works in the business. When working with this family
enterprise, who is the most important person to keep happy?
A) Dad
B) Mom
C) Children
D) The whole family - ANSWER-D) The whole family
A retirement cash flow plan, which details the amount of, additions to and uses of
investment assets, is most accurate when the
following is used in the analysis:
A) A static rate of return
B) Statistical modeling
C) Historical S&P500 rate of return
D) The historical average rate of return on the client's existing portfolio - ANSWER-B)
Statistical modeling
A strategy which makes assets difficult or impossible to reach is called:
A) Asset insurance
B) Asset limitation
C) Asset protection
D) Asset placement - ANSWER-C) Asset protection
A typical estate plan helps plan for a business owner's ____ .
A) Marketing
B) Disability
C) Human Capital
D) 90-Day Sprints - ANSWER-B) Disability
A(n) _______ provides for the stability and continuity of a closely held business and is a
crucial part of a business owner's overall succession and estate plan.
A) Risk Management Assessment
B) Buy-sell agreement
C) Exit Plan
D) Investment Portfolio - ANSWER-B) Buy-sell agreement
, According to EPI's first national State of Owner Readiness Survey, what percentage of
business owners have done no exit planning
at all?
A) 99%
B) 40%
C) 83%
D) 49% - ANSWER-D) 49%
According to the Family Firm Institute, what percentage of family transitions survive into
the second generation?
A) 20%
B) 30%
C) 50%
D) 70% - ANSWER-B) 30%
Accountants, attorneys, and financial planners are all examples of advisors that should
be added to the team starting in the _____ gate of the value acceleration process.
A) Discover
B) Prepare
C) Decide
D) Determine - ANSWER-A) Discover
Action Plan Priorities - ANSWER-De-risking
Strategy
Efficiency
Growth
Culture
Advisors of the future will chanage the paradigm by: - ANSWER-Exit planning is
business planning
Value is all about transferability
Work from a common framework, growth focus, align PFB
Ask Owners Value, Transition, and Intangible Capital questions
After investing in a business, what is the typical timeframe before a private equity group
exits that business themselves?
A) 1 to 2 years
B) 2 to 5 years
C) 3 to 7 years
D) 10 to 12 years - ANSWER-C) 3 to 7 years
After the initial step of creating the ESOP trust, what is a company's next step in the
formation process?
"Do you want to keep growing or do you want to shift focus to exiting?" is an example of
a question owners should ask themselves
every ______.
A) Week
B) Month
C) 90 Days
D) 120 Days - ANSWER-C) 90 Days
4 area business owner can NOT control - ANSWER-Taxes
Time Horizon
Inflation
Rate of Return
5. When it comes to estate planning and exit planning, who do you include?
A) The owner of the company
B) The owner's spouse
C) The owner's adult children
D) The owner's children's spouses
E) All of the above - ANSWER-E) All of the above
7 Value Domains - ANSWER-Culture
Risk
Strategy
Productivity
Sales & Marketing
Financial
Leadership & People
80% of all ESOPs are in companies with less than ____ employees.
A) 10
B) 30
C) 300
D) 1000 - ANSWER-C) 300
A _____ gift is one in which the person who received the gift has the unrestricted right
to the immediate possession and use of it.
A) IRA gift
B) ILIT gift
C) Present interest gift
D) Future interest gift - ANSWER-C) Present interest gift
,A ________ buyer may consider purchasing a company in order to enter a new market
or obtain new intellectual property.
A) Hypothetical buyer
B) Financial buyer
C) Strategic buyer
D) Family buyer - ANSWER-C) Strategic buyer
A business attractiveness score of 67% Is considered:
A) Average
B) Below average
C) Above average
D) Inaccurate - ANSWER-C) Above average
A business owner you are advising on exit options does not have a family member or
children to transfer the business to. She would
like the exit option that will get her the highest price for the business, more cash up
front, and will allow her to walk away faster. What
option do you recommend?
A) Sale to existing partners
B) Recapitalization
C) Sale to third party
D) Management buy-out - ANSWER-C) Sale to third party
A business's Range of Value (ROV) multiple is determined by ____ .
A) The business owner
B) The private capital market
C) The business's client base
D) The IRS - ANSWER-B) The private capital market
A client's 3-5 year inspirational vision should be revisited:
A) Every week
B) Every month
C) Every 90 days
D) Every year - ANSWER-C) Every 90 days
A Confidential Information Memorandum (CIM) serves as a:
A) Preliminary due diligence document
B) Sales document
C) Communication of opportunities and weaknesses
D) All of the above - ANSWER-D) All of the above
,A family enterprise can best be described as a ____ .
A) System
B) Process
C) Hassel
D) War - ANSWER-A) System
A father owns his business 100%. He has been married 35 years to the mother of his
three children. The oldest child works in the business. When working with this family
enterprise, who is the most important person to keep happy?
A) Dad
B) Mom
C) Children
D) The whole family - ANSWER-D) The whole family
A retirement cash flow plan, which details the amount of, additions to and uses of
investment assets, is most accurate when the
following is used in the analysis:
A) A static rate of return
B) Statistical modeling
C) Historical S&P500 rate of return
D) The historical average rate of return on the client's existing portfolio - ANSWER-B)
Statistical modeling
A strategy which makes assets difficult or impossible to reach is called:
A) Asset insurance
B) Asset limitation
C) Asset protection
D) Asset placement - ANSWER-C) Asset protection
A typical estate plan helps plan for a business owner's ____ .
A) Marketing
B) Disability
C) Human Capital
D) 90-Day Sprints - ANSWER-B) Disability
A(n) _______ provides for the stability and continuity of a closely held business and is a
crucial part of a business owner's overall succession and estate plan.
A) Risk Management Assessment
B) Buy-sell agreement
C) Exit Plan
D) Investment Portfolio - ANSWER-B) Buy-sell agreement
, According to EPI's first national State of Owner Readiness Survey, what percentage of
business owners have done no exit planning
at all?
A) 99%
B) 40%
C) 83%
D) 49% - ANSWER-D) 49%
According to the Family Firm Institute, what percentage of family transitions survive into
the second generation?
A) 20%
B) 30%
C) 50%
D) 70% - ANSWER-B) 30%
Accountants, attorneys, and financial planners are all examples of advisors that should
be added to the team starting in the _____ gate of the value acceleration process.
A) Discover
B) Prepare
C) Decide
D) Determine - ANSWER-A) Discover
Action Plan Priorities - ANSWER-De-risking
Strategy
Efficiency
Growth
Culture
Advisors of the future will chanage the paradigm by: - ANSWER-Exit planning is
business planning
Value is all about transferability
Work from a common framework, growth focus, align PFB
Ask Owners Value, Transition, and Intangible Capital questions
After investing in a business, what is the typical timeframe before a private equity group
exits that business themselves?
A) 1 to 2 years
B) 2 to 5 years
C) 3 to 7 years
D) 10 to 12 years - ANSWER-C) 3 to 7 years
After the initial step of creating the ESOP trust, what is a company's next step in the
formation process?
