Section A Flashcards
One Benefit of a business using Loan Capital as a source of Finance
Loan Capital means that the money can be processed and given immediately to the business, and so when in need for an emergency (such as finding a gap in the market), the business is able to resolve their issue, therefore grow their buisness.
2A)
B and C
2B)
B and E
2C)
Annual Average Profit / Initial Investment.
Explain One impact of a business using high-quality products
Using high quality products help gain customer satisfaction, therefore it develops a level of trust and loyalty from the customer, which then means they are more likely to repurchase from the business, increasing their sales.
3a)
D
3B)
Revenue = quantity x price
3C)
The business will have to pay a tax on their imports, therefore increasing their total costs, which means that the profit will also decrease.
One benefit of an Company setting individual Targets
Will increase workers productivity because they know what their specific target is and will try to reach it, which means that the business will grow quicker as workers are motivated to make it succeed.
Disadvantage of a Company Letting Employees use Remote Working
Working from home increases the workers nonmotivation because they associate home with relaxation. This means that employees are less likely to care about their work, which therefore causes their work productivity to decrease, causing a slower growth in the business.
Another reason is because workers could potentially lose a sense of direction. This means that as workers cannot directly ask questions, they are unable to receive important feedback and will be unsure on how to grow/ improve their work. As a result, this causes the quality of products to become poor as it would not meet the businesses expectation.
One impact on Netflix from an increase on competition
Netflix may try to add more movies onto their viewings in order to spread out their market and attract a range of customers.
Analyse Benefit to Netflix using internet to distribute viewing services
They will have lower fixed costs- this means that their breakeven will be easier to reach, which causes their profit to also increase.
Gross Profit
Gross Profit = revenue - costs of goods sold.
Net Profit Margin
(net profit / total revenue) x 100
Impact of Netflix increasing their monthly subscription
An impact could be that customers may switch to Netflix’s rivals / competitors such as Amazon Prime. This means that Netflix will lose UK viewers, which then therefore causes the business’s revenue to drop.
However, by increasing the price for individual customers, it means that Netflix will gain more profit. This is because the business will
