Unit 1 - Business Activity Flashcards
What is an entrepreneur
Someone who starts up and runs their own business that are prepared to take risks
Why would an entrepreneur set a business
(purpose of businesses)
Spotting an opportunity
Developing an idea
Satisfying needs of costomers
What are the characteristics of an entrepreneur
Creativity
Risk taking
Determination
Confidence
What is break even
When a business doesn’t make a profit or loss
Why would a break even forecast help a business
Shows them how much they need to sell to make profit
What are the limits of break even
Figures may turn out to be different
Only relate to 1 product
What is the definition of average rate of return
a way of comparing the profitability of different choices over the expected life of an investment.
How could ARR help a business
It helps them make decisions by showing them which investment is more profitable
