Understanding Financial Resources for Business

Front

Which of the following is a source of finance for a business? Bank overdraft, personal savings, venture capital, all of the above.

Back

All of the above.

Front

What is the primary purpose of calculating start-up costs?

Back

To estimate the initial investment required.

Front

Which of the following is considered a fixed cost? Raw materials, rent, utility bills, commission on sales.

Back

Rent.

Front

Variable Cost

Back

A cost that changes with the level of output.

Front

What is a key component of cash flow management?

Back

Monitoring cash inflows and outflows.

Front

What is an example of a funding option for businesses?

Back

Equity financing

Front

How do you calculate the total start-up costs for a business?

Back

Sum all initial expenses required to start the business.

Front

Which of the following is a method to improve cash flow?

• Increase inventory levels
• Offer longer credit terms to customers
• Reduce expenses
• Increase employee salaries

Back

Reduce expenses

Front

What is the difference between fixed and variable costs?

Back

Variable costs change with production levels; fixed costs do not.

Front

Which of the following is a budgeting strategy for running costs?

• Ignoring unexpected expenses
• Estimating costs based on past data
• Allocating all funds to marketing
• Reducing quality to save money

Back

Estimating costs based on past data