Test
1.3 Putting a business idea into practice
Preguntas del test (33)
1What is an aim?
- AAim to achieve things in the business
- BAn overall goal that a business is trying to achieve
- CSmall steps to achieve an overall goal
- DA process of thought when planning within a business
2Break-even analysis allows firms to find out the minimum amount they need to sell to get by
- AVerdadero
- BFalso
3Choose 4 non-financial aims a business may have
- AAccomplishing a personal challenge
- BAchieving personal satisfaction
- CGaining independence and control
- DDoing what's right for society
- EFeeling good on a personal level
- Fto survive within a market
4Choose 5 financial aims a business may have
- ATo survive
- BMaximise sales
- CIncrease market share
- DAchieve financial security
- EMaximise profit
- FTo gain rewards
5What is an objective?
- ASpecific steps to achieve an aim
- BSelling a certain amount of products
- CEarning a high profit
- Doverall goals a business wants to achieve
6What is a S.M.A.R.T objective ?
- ASpecific. Measurable. Achievable. Relevant. Time Bound
- BSpecific. Measurable. Achievable. Realistic. Time Bound
- CSuitable. Measurable. Achievable. Relevant. Time Bound
- DSuitable. Measurable. Achievable. Realistic. Time Bound
7Revenue is the Income earned by a business
- AVerdadero
- BFalso
8How do you calculate revenue?
- ARevenue = Quantity Sold x Price
- BRevenue = Price x Fixed Cost
- CRevenue = Quantity Sold x Variable Cost
- DRevenue = Quantity Sold x Fixed Cost
9What is a fixed cost?
- ACosts that do not vary with output. They remain the same whether the business produces 100 units or 0 units
- BCosts you have to pay at the beginning of the business
- CCosts you pay every quarter
- DThe opposite as a variable cost
10What is a variable cost?
- AIncrease with the amount of products produced and sold
- BThe opposite as a fixed cost
- CCosts that are expensive
- DCosts that you can pay over a period of 2 months
11total costs = fixed costs + variable costs
- AVerdadero
- BFalso
12How do you calculate total variable cost?
- ATotal Variable Cost = quantity sold x variable cost per unit
- BTotal Variable Cost = quantity sold + total costs
- CTotal Variable Cost = quantity sold / price
- DTotal Variable Cost = price / quantity sold
13How to calculate Interest (on loans) ?
- AInterest (on loans) = (total repayment - borrowed amount / borrowed amount) x 100
- BInterest (on loans) = total repayment - borrowed amount / borrowed amount
- CInterest (on loans) = (borrowed amount /total repayment - borrowed amount) x 100
- DInterest (on loans) = (total repayment + borrowed amount / borrowed amount) x 100
14Profit = Revenue - Costs
- AVerdadero
- BFalso
15How to calculate break-even point (in units)?
- ABreak-even point (units) = fixed cost / selling price - variable cost
- BBreak-even point (units) = variable cost / selling price - fixed cost
- CBreak-even point (units) = total costs / selling price - fixed cost
- DBreak-even point (units) = total costs / selling price - variable cost
16Margin of Safety = Actual sales (or budgeted sales) - Break-even sales
- AVerdadero
- BFalso
17The firm will use budgeted sales if it's trying to forecast its future margin of safety. The budgeted sales will be the sales the business expect to make.
- AVerdadero
- BFalso
18One benefit of a firm knowing its margin of safety for a financial year is...
- AIt can see how much its output can fall before the business starts running at a loss
- BIt knows the amount of sales it will make
- CIt knows how much revenue to expect
- DIt knows how much revenue is needed to equal total costs
19Net Cash Flow = cash inflows - cash outflows
- AVerdadero
- BFalso
20What is cash flow ?
- AThe process of cash flowing in and out of a business
- Bpaying money out of the business
- CA source of income
213 examples of cash outflows are...
- APaying wages to staff
- BBuying equipment
- CRepayment of loans
- DReceiving a loan payment
223 examples of cash inflows are...
- AGovernment grants
- BPersonal funds
- CCash sales
- DCosts of making products
23BEP is when total costs = total revenue
- AVerdadero
- BFalso
24What is the margin of safety?
- AThe number of sales above the BEP
- BThe amount of revenue left after costs
- CNet cash flow
252 ways of increasing revenue are...
- AIncreasing selling price
- BIncreasing amount sold by promotions, offers etc.
- CMake more products
264 problems with cash flow forecasting?
- ASales prove lower than expected
- Bcustomers don't pay up on time
- Ccost of production proves higher than expected
- Dcertain costs aren't included
- EIt is difficult to read
275 main causes of cash flow problems?
- AOver spending
- BGetting too big too quick
- CToo much stock
- DGiving too much credit to customers
- ESeasonal demands
- Fvariable cost too high
- Glocation of store
285 reasons why cash flow forecasting is important?
- Aidentifies possible shortfalls in cash balance
- Bshows if business can afford to pay suppliers and customers
- Cspot problems with customer payments
- Dshows bank you've planned your finances
- Eexternal stakeholders (e.g. banks) may require a regular forecast
- Ffun to make
- Gseems to be professional
29Examples of Short-term finance...
- ATrade Credit
- BOverdrafts
- CShort-term bank loan
- Dretained profit
30Examples of Long-term finance....
- ALong-term loans
- BPersonal savings
- CShare Capital
- DCrowd Funding
- EHire purchase
- FTrade Credit
31An overdraft allow a business to take more money out of its bank account than it has paid into it
- AVerdadero
- BFalso
32Chose one advantage and one disadvantage of using overdrafts
- AAllow businesses to make payments on time even if they don't have enough cash
- BHave a high interest rate
- CIf it isn't paid off, the bank can take some of the businesses assets
- DHave to pay back straight after next payment which will cover amount withdrawn
- Ecan withdraw as much cash as you want
33Chose one advantage and one disadvantage of using personal savings as a source of finance.
- AOwner could end up loosing own money if the business fails
- Bonly a small amount of money
- CInterest free
- DCan buy everything straight away and expand quick
Información
- Descripción
- Overview of the theme 1, topic 1.3
- Autor
- holly swift
- Idioma
- English
- Visitas
- 343
- Etiquetas
- Valoración
- Aún sin valoraciones Valora este test