Higher Business Management- Management of Finance

What is the role of the finance department?

• To product the products

• To manage cash that goes in and out of the business

• To recruit new staff members

• To advertise and promote the company's products

Private Limited Companies can be financed by:

• Selling shares on the stock market

• The owners savings

• Bringing in new partners

• Selling shares to family and friends

Sole traders, when just starting up, are usually financed by:

• Share issue

• Mortgage

• The owners savings

• Hire purchase

An advantage of taking out a bank loan is:

• Can be repaid over a longer period of time

• It is quick and easy to set up

• Can agree a certain amount with the bank

• there is no advantage to a bank loan

A Government Grant is

• Money paid from the Government

• Money that doesn't need to be paid back

• Very difficult to get

• All of the above

What is Higher Purchase

• Taking more money out of your account than is available

• Buying an item and paying for it over a period of time

• A special loan taken out to buy property

• Money paid from the Government

What is a fixed cost?

• Costs that stay the same no matter the output

• Costs that change depending on output

What is an example of a fixed cost:

• Loan Repayments

• Wages

• Electricity

• Purchases

What is a variable cost

• Costs that stay the same no matter the output

• Costs that change depending on output

Which of the following is an example of a variable cost?

• Loan Repayments

• Rent

• Insurance

• Electricity