Understanding Financial Resources for Business

Which of the following is a source of finance for a business?

• Bank overdraft

• Personal savings

• Venture capital

• All of the above

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

• To determine the break-even point

• To estimate the initial investment required

• To calculate profit margins

• To assess employee salaries

Which of the following is considered a fixed cost?

• Raw materials

• Rent

• Utility bills

• Commission on sales

What is a variable cost?

• A cost that remains constant regardless of production levels

• A cost that changes with the level of output

• A one-time cost incurred at the start of a business

• A cost associated with employee training

Which of the following is a key component of cash flow management?

• Increasing fixed costs

• Delaying payments to suppliers

• Monitoring cash inflows and outflows

• Reducing product prices

What is an example of a funding option for businesses?

• Equity financing

• Bartering

• Leasing

• All of the above

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

• Add all fixed and variable costs

• Sum all initial expenses required to start the business

• Subtract liabilities from assets

• Multiply fixed costs by variable costs

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

• Increasing inventory levels

• Offering longer credit terms to customers

• Reducing expenses

• Increasing employee salaries

What is the difference between fixed and variable costs?

• Fixed costs change with production levels, variable costs do not

• Variable costs change with production levels, fixed costs do not

• Both change with production levels

• Neither change with production levels

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