1.3 - Putting A Business Idea Into Practice

Question 1

Financial aims and objectives

Answer 1

Survival
Profit
Sales
Market share
Financial security

Question 2

Nonfinancial aims and objectives

Answer 2

Social objectives
Personal satisfaction
Challenge
Independence
Control

Question 3

Why aims and objectives differ

Answer 3

Size and age of the business
Who owns the business
The level of competition

Question 4

Revenue

Answer 4

Quantity sold x price

Question 5

Total variable cost

Answer 5

Quantity sold x variable cost per unit

Question 6

Total costs

Answer 6

Total variable cost + total fixed cost

Question 7

Profit

Answer 7

Revenue - costs

Question 8

Interest

Answer 8

(total repayment - borrowed amount)/borrowed amount x 100

Question 9

Break even point in units

Answer 9

Fixed cost/(sales price-variable cost per unit)

Question 10

Break even point in revenue

Answer 10

Break even point in units x sales price

Question 11

Margin of safety

Answer 11

Actual sales - break even sales

Question 12

Net cash flow

Answer 12

Cash inflows - cash outflows

Question 13

Short term sources of finance for a small business

Answer 13

Overdraft
Trade Credit

Question 14

Long term sources of finance for a small business

Answer 14

Personal savings
Venture capital
Share capital
Loans
Retained profit
Crowd funding