1. What Is Business?

Which of the following is a disadvantage of a private limited company (ltd)?

• Finance can be raised by selling shares

• Limited liability

• Original owners retain control of the company

• Shares are sold privately

Which one of the following is an element of the external environment?

• Product portfolio

• Machinery and equipment

• Employees

• Interest Rates

Ordinary shares traded on the stock exchange are those issued by:

• Sole traders

• Private limited companies

• Public limited companies

• Public sector organisations

Which one of the following will be a variable cost for a coffee shop?

• Ingredients for the cups of coffee

• Salary paid to the manager

• Advertising costs

• Rent paid for the premises

The sales revenue for a market has grown by 2% in 2016 compared with sales of £670 million in 2015. What is the new sales revenue for the market?

• £13.4 million

• £672.0 million

• £683.4 million

• £1340.0 million

Market capitalisation is the total value of a company’s:

• Assets

• Dividends paid to shareholders

• Shares, based on the current share price

• Shares, based on the original share price

Public limited companies usually pay ordinary shareholders their share of the profits in the form of:

• Inventory

• Dividends

• Fixed interest payments

• Retained profits

When shareholders can only lose (are therefore liable for) the value of their investment in the share capital of the company is known as what?

• Unlimited liability

• Limited liability

• Insolvency

• Market capitalisation

According to the government the vast majority (62.7%) of businesses in the UK are...

• Sole Traders

• Partnerships

• Limited Companies

• Not-For-Profit Organisations

Select all the potential external factors which could influence costs and demand for a business:

• Incomes

• Interest Rates

• Marketing

• Training

• Demographics