KT12: 1.5.5 Business choices, 1.5.6 Moving from entrepreneur to leader

Question 1

opportunity cost

Answer 1

the cost of missing out on the next best alternative when making a decision (or when committing resources)

Question 2

Trade-off

Answer 2

accepting less of one thing to achieve more of another (for example, slightly lower quality in exchange for cheapness)

Question 3

Delegation

Answer 3

passing authority down the hierarchy, to allow junior employees some decision-making power

Question 4

Liquidity

Answer 4

the ability of a business to pay its bills on time which all depends upon having enough cash in the bank

Question 5

Overtrading

Answer 5

when a business expands at a rate which cannot be sustained by its capital base