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19 Cards in this Set
- Front
- Back
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On a break even chart, what line does the the total revenue line meet at the breakeven point?
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The revenue line meets the total cost line at the breakeven point.
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What does breakeven analysis NOT assume?
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The breakeven analysis does not assume that the external environment is unstable.
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What is contribution?
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Contribution is the price of an item less the variable cost per item.
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If average variable cost is £10, and average selling price is £25, then what is contribution?
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The contribution is £15.
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Which of the following options is a source of internal finance?
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An example of a source of internal finance is selling off assets.
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Which of the following does an overdraft usually have?
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An overdraft usually has a variable rate of interest.
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What do lenders ask for as a guarantee that a loan will be repaid?
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Lenders ask for collateral as a guarantee that a loan is repaid.
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What is someone who lends money called?
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Someone who lends money is called a creditor.
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If a company reduces a product's price, what does this mean for their revenue?
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A decrease in price could lead to an increase or decrease in revenue. It will depend on how many products are sold.
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When is a business making a profit?
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A business is making a profit when revenues are higher than costs.
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A firm sells 10 units at £5 each. Its total costs are £30. How much profit is made?
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A profit of £20 is made.
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An increase in output does NOT mean an increase in:
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An increase in output does not mean an increase in overheads.
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What does a postive cash flow mean?
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A positive cash flow means the business is making a profit.
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What is a long term way to improve cash inflow?
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A long term way of improving cash flow is to take out a loan.
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If the opening balance is £5,000, total receipts are £4,000 and the closing balance is £3,000 then total payments are:
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The total payments are £6,000.
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What is net cash flow?
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Net cash flow is the difference between money in and money out.
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What makes a business solvent?
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A business is solvent when it has enough working capital.
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What does a balance sheet show?
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The balance sheet shows the value of the business on a particular date.
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If gross profit is £60,000 and other expenses are £100,000 then what is the net profit?
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The net profit is -£40,000.
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