SECTION 3:5 TEST

1. According to Warren Buffett, what is the key principle of saving and spending?
A) Spend first, save whatever is left
B) Save first, then spend what is left
C) Focus on spending without worrying about savings
D) Invest all your money without saving

2. What is cash flow, and why is it important for entrepreneurs?
A) The money coming in and going out of a business; it’s crucial for maintaining operations
B) The amount of profit a business makes annually
C) A way to track marketing expenses
D) Only relevant for large companies

3. What does Mark Cuban advise about money management for entrepreneurs?
A) Spend as much as possible to grow quickly
B) Live frugally and save as much as possible, especially in the early stages
C) Invest heavily in advertising
D) Focus on luxury purchases to attract attention

4. How did Elon Musk approach financial risk with Tesla and SpaceX?
A) He took risks without considering the consequences
B) He risked nearly all his money but had a deep understanding of the financial risks
C) He avoided all financial risks
D) He focused only on immediate profits

5. What was Jeff Bezos’ financial strategy for Amazon in its early days?
A) Focusing on short-term profits over long-term growth
B) Investing heavily in infrastructure to prioritize long-term growth
C) Minimizing investments to reduce risk
D) Focusing on luxury product lines

Answers:

1. B) Save first, then spend what is left
2. A) The money coming in and going out of a business; it’s crucial for maintaining operations
3. B) Live frugally and save as much as possible, especially in the early stages
4. B) He risked nearly all his money but had a deep understanding of the financial risks
5. B) Investing heavily in infrastructure to prioritize long-term growth