N5 Business Management Prelim revision

What is a source of finance that a business doesn't have to pay back?

• Bank loan

• Grant

• Loan from family

• Mortgage

A bank loan has to be paid back plus (a)  

Which is an example of the CAPITAL factor of production?

• Machinery purchased for product manufacture

• Workers hired for production

• A field harvested for raw materials

• The business owner

When selecting a supplier, which is NOT an important factor to consider?

• Lead time

• Supplier's price

• quality of supplies

• Supplier's last tax return

True or false. If the conditions of a GRANT are broken, the grant money will have to be repaid

• True

• False

Ways of ensuring good customer service include...

• Having well trained employees

• Buy one get one free promotion

• Market segmentation

• Having a procedure for handling complaints

What is a drawback of SHIPPING as a method of transporting goods?

• It's a cheap way of transporting a large volume of items

• Large bulky items can be transported easily

• Import tax tends to be higher

• It takes a long time to transport goods from A to B

Identify the statements that are FALSE

• Partnerships are owned by partners whereas ltd companies are owned by shareholders

• Both limited companies and partnerships have unlimited liability

• The public can buy shares in a private limited company on the stock market

• Partnerships are controlled by the partners whereas a board of directors will control a private limited company

What factors should be considered when setting the price of a product or service?

• Price of competitors products

• The quality of the product

• Cost of making a product

• Salary of the Managing Director

Why is a business plan important for a new business?

• It guarantees profitability

• Having one reduces corporation tax

• It sets out a strategy for the future

• It will be required for loan and grant applications