Business Stuff

Question 1

Limited Liability

Answer 1

Shareholders are only legally responsible up to the amount that they have invested

Question 2

Segmentation

Answer 2

The process of splitting up a market based on the characteristics of customers such as age or gender

Question 3

Margin of safety

Answer 3

Is the difference found between the unity the business must sell to make sure they break even and how many units the business expects to sell

Understanding the margin of safety means the business could calculate by how many units sales can decrease without making a loss and this supports the business’ planning

Question 4

Sole trader advantages

Answer 4

• Full control of the business and can make all of the decisions themselves
• More flexible working schedule