IGCSE business studies section 5 MCQ

Front

Businesses need finance for: investment in other businesses, the purchase of non-current assets, improving their bank balance, increasing credit to customers.

Back

the purchase of non-current assets

Front

Which of the following is an internal source of finance? Debenture, Share issue, Retained profit, Overdraft

Back

Retained profit

Front

The best source of finance for the purchase of a motor vehicle is: mortgage, overdraft, leasing, working capital.

Back

leasing

Front

Which of the following is a benefit of using internal sources of finance? Interest rates are low. , It is always available. , It is less costly than external sources. , It is more costly than external sources.

Back

It is less costly than external sources.

Front

An advantage of equity financing is that: it does not have to be repaid

Back

it does not have to be repaid

Front

Micro-finance is usually for: entrepreneurs in developed economies who are able to borrow from banks, when an entrepreneur needs a large amount of capital at low interest rates, entrepreneurs in developing economies who are unable to borrow from other lenders, established businesses in developing economies.

Back

entrepreneurs in developing economies who are unable to borrow from other lenders

Front

A cash-flow forecast shows the:

Back

timing of cash inflows and outflows over a period of time

Front

A short-term cash shortage might be financed by: not paying employees’ wages, reducing dividend payments to shareholders, taking out a bank loan, offering discounts to credit sales customers.

Back

offering discounts to credit sales customers.

Front

A business can improve its working capital by: increasing sales, reducing inventories, increasing credit terms to customers, paying trade payables sooner than it needs to

Back

reducing inventories

Front

Working capital measures: business profitability, business efficiency, business liquidity, business productivity

Back

business liquidity