Sources of Finance, Revenues and Costs for BMW

Which of the following would be classified as capital expenditure for BMW’s expansion in electric vehicles (EVs)?

• Salaries for assembly line workers

• Payments for raw materials

• Purchase of a robotic assembly system

• Marketing expenses for a new product launch

What is a key reason for BMW to prefer retained profit over issuing new equity to fund its innovation strategy?

• It improves profitability ratios

• It avoids shareholder dilution

• It always results in tax savings

• It is a variable cost

BMW is evaluating finance options to raise €6 billion. Which of the following sources involves giving up part ownership of the company?

• Bank loan

• Retained earnings

• Share capital

• Government subsidy

Why might BMW lease advanced robotics equipment rather than purchase it outright?

• To increase variable costs

• To reduce liquidity

• To avoid large upfront capital expenditure

• To reduce employee motivation

Which of the following best describes revenue expenditure for BMW?

• Purchase of autonomous driving R&D equipment

• Salaries for assembly line workers

• Payments for raw materials

• Marketing expenses for a new product launch

BMW plans to invest €12 billion in EV production. If €6 billion comes from retained earnings, how much external finance is still required?

• €4 billion

• €5 billion

• €6 billion

• €8 billion

Which of these is NOT an internal source of finance for BMW?

• Retained profit

• Sale of unused machinery

• Issuing ordinary shares

• Reducing stock levels

BMW forecasts 8% revenue growth. If current revenue is €150 billion, what is the projected revenue next year?

• €151.2 billion

• €156 billion

• €158 billion

• €162 billion

Which stakeholder group is MOST directly interested in BMW's profitability ratios?

• Suppliers

• Employees

• Shareholders

• Customers

Which source of finance is most likely to increase BMW’s gearing ratio (Non-current liabilities / Capital Employed)?

• Government grant

• Trade credit

• Issuing ordinary shares

• Bank loan