Section 1.3

Question 1

What is breakeven

Answer 1

Breakeven point. At low levels of sales, a business is not selling enough units for revenue to cover costs. A loss is made. … The breakeven point is reached when the total revenue exactly matches the total costs and the business is not making a profit or a loss.

Question 2

How do we check for breakeven

Answer 2

We check for breakeven by using line graphs .

Question 3

What is sources of finance ?

Answer 3

Some sources of finance are short term and must be paid back within a year. Other sources of finance are long term and can be paid back over many years. Internal sources of finance are funds found inside the business. For example, profits can be kept back to finance expansion.

Question 4

Name two sources of finance

Answer 4

Internal and external

Question 5

What is an internal source of finance.

Answer 5

Internal sources of finance are funds found inside the business. For example, profits can be kept back to finance expansion. Alternatively the business can sell assets (items it owns) that are no longer really needed to free up cash.

Question 6

What is an external source of finance?

Answer 6

External sources of finance might include taking on new business partners or issuing equity or bonds to create long term obligation, or commercial paper to take on shorter term debt.

Question 7

What is cash-flow forecasting

Answer 7

Cash flow forecasting is examining the amount of money coming into the business and at what rate the money is coming in at .

Question 8

How do we measure cash-flow forecasting?

Answer 8

We measure cash-flow by using either line of best fit , bar graphs or we can use line graphs .