IB Business management HL (Gia Như 02.01.2025)

What is the primary reason entrepreneurs need finance when starting a new business?

• To cover initial setup costs
• To pay dividends
• To buy personal assets
• To invest in other businesses

Which of the following is considered capital expenditure?

• Paying salaries
• Purchasing machinery
• Buying raw materials
• Paying rent

What is working capital?

• Current assets - Current liabilities
• Long-term assets - Long-term debt
• Total assets - Total liabilities
• Equity - Liabilities

Why do businesses need finance for research and development (R&D)?

• To pay taxes
• To invest in technical research
• To pay dividends
• To cover utility bills

Which of the following is an example of revenue expenditure?

• Buying machinery
• Purchasing technology
• Paying rent
• Buying land

What is retained profit?

• Profit distributed to shareholders
• Profit reinvested in the business
• Profit used to pay off debts
• Profit saved in a bank account

Which internal source of finance involves selling business assets that are no longer required?

• Retained profit
• Owner’s capital
• Sale of unused assets
• Trade credit

What is the main advantage of using internal finance?

• It involves third parties
• It is often free
• It always meets the needs of the business
• It has no opportunity cost

Which external source of finance involves raising money from the sale of shares in a limited company?

• Loans
• Overdrafts
• Share capital
• Trade credit

What is a mortgage typically used for in a business context?

• Purchasing buildings
• Buying raw materials
• Paying salaries
• Marketing campaigns