423708
| Question | Answer |
| List three examples of direct costs and three examples of indirect costs | Materials-Labour-Machinery........Management salaries, rent of building, Heating |
| Define each of the following terms- a)Sales b)Price c)Revenue d)Costs | B)Price-How much somebody has paid-by a customer D)Costs-The amount a business pays for manufacturing C) income earned by a business A0 The amount a business gets for units sold |
| If Tardy Ltd output 30,000 alarm clocks at a total cost of £120,000, what is the average cost of making each clock? | TC-Output=AVERAGE COST£4.00 |
| Calculate how much profit a business made in 2008 if it had revenue of £125,000 and costs of £80,000 ? | 125-80=45 p=rv-C |
| If a firms revenue is lower than its costs over a period of time , will the firm make a profit or loss? | Loss |
| Give to reasons why a new business needs a source of start up finance? | To They need to buy products from suppliers -enough cash to run a business day to day capital To pay suppliers, fund expansion |
| Name two short term sources of finance , and explain how they work ? | Grant-given to qualify small businesses, the princes trust gives local enterprises to start up-trade credit-invoice is useful for small firms |
| Describe one benefit of a business using a grant over other sources of start up finance | They do not have to pay it back |
| Explain what is meant by venture capital? | When individual or a business invests money into smaller firm and they often take a stake in the ownership of he business |
| Why might a new or small firm find it hard to raise finance? | Cant fund prodjects and are less likely to pay the bank back than larger firms who are up and rnning |
| Explain two ways that the government helps new business ? | A lot to gain, not claiming off the government, gain tax, create employment less benafits-Business plan and training |
| Describe how it may be beneficial to banks to help new businesses Give two examples of how they do this | They give out loans and overdrafts, they also give advice to set up the business |
| Describe how the prince's trust helps young entrepreneurs | Advise, grants and interest loans to young entrepreneurs |
| Explain what each of the following terms means a) Cash Inflow b)Cash Outflow c)Net cash flow | a)When a firm sells products, B) buys materials or pays wages C) Difference between A and B over a period of time |
| Explain why a cash flow forecast is useful to business? | To anticipate problems, liquidity problem (lack of cash) all inflows and outflows - moniter impact |
| A firm started the month with a bank balance of £2500 and had a net cash flow of £3000 for the month. What was the firms bank balance at the end of the month | $5500 |
| What do credit terms tell you? | Can effect cash flow |
| Explain how letting customers pay for goods on credit can affect a firm's cash flow | They could be must arrange short time finance |
| Dave's Dodgy Motors Ltd is suffering from poor cash flow. Explain three problems that might result | Not enough cash in the business to meet day 2 day expenses, staff may not get paid in time, not be able to take advantage-poor sales [] |
| Explain how over trading can lead to poor cash flow | Buys too many raw materials and hires too many staff, it can't pay off its debts, poor business decisions, expand not enough moneys |
| Give three ways that a business could try to improve cash flow | reschedule receipts of income could give less generous terms insist they pay cash-Reschedule payment to suppliers 90 3 carry stock of unsold products |
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