Business 1.3

Question 1

Difference between aims and objectives

Answer 1

Aims - Broad, long term aims
Objectives - Smaller, more specifc objectives

Question 2

Acronym for objectives

Answer 2

Specific
Measurable
Acheivable
Realistic
Time bound

Question 3

Revenue formula

Answer 3

Quantity sold x price

Question 4

Total cost formula

Answer 4

Fixed costs + Variable

Question 5

Profit formula

Answer 5

Revenue - Total costs

Question 6

Break even point

Answer 6

Fixed costs/Contribution per unit

Question 7

Features of break even graph

Answer 7

Break even point - Where revenue and costs cross
Profit - Gap between reveue and costs

Question 8

How to manage costs

Answer 8

Generous overdraft facility

Question 9

Why do businesses need finance

Answer 9

Growth
Start up costs
Day to day running

Question 10

4 types of sources of finance

Answer 10

Internal
External
Long term
Short term

Question 11

Examples of long term internal finance

Answer 11

Owners personal savings
Retained profit
Share capital

Question 12

Long term external finance

Answer 12

Bank Loan
Crowdfunding
Venture capital
Government grant

Question 13

Short term external

Answer 13

Bank overdraft
Trade credit`