MCQ Revision Test 4

‘The process of transforming raw information into useful information that can support various activities of a business’. The definition above most accurately describes

• data mining.

• e-commerce.

• enterprise resource planning.

• gathering big data.

Despite a significant increase in its sales revenue, a product’s market share falls from 60% to 50%. This product is a

• cash cow.

• dog.

• problem child/question mark.

• star.

Statement 1: ‘An increase in its level of capacity utilisation can help a business because it allows it more time for maintenance and repair of equipment.’

Statement 2: ‘An increase in its level of capacity utilisation can help a business because it allows it to meet unexpected increases in demand.’

Read statements 1 and 2 and select the correct option from the following options.

• Statement 1 is true. Statement 2 is true.

• Statement 1 is true. Statement 2 is false.

• Statement 1 is false. Statement 2 is true.

• Statement 1 is false. Statement 2 is false.

The company’s operating profit is

• £3 million.

• £5 million.

• £6 million.

• £8 million.

Statement 1: ‘Lean production should reduce unit costs because it involves a business buying raw materials in greater bulk.’

Statement 2: ‘Lean production should reduce unit costs because it reduces wastage of raw materials.’

Read statements 1 and 2 and select the correct option from the following options.

• Statement 1 is true. Statement 2 is true.

• Statement 1 is true. Statement 2 is false.

• Statement 1 is false. Statement 2 is true.

• Statement 1 is false. Statement 2 is false.

The table below shows four possible scenarios.

In which of these scenarios is strategic drift least likely to occur?

• A Scenario A

• B Scenario B

• C Scenario C

• D Scenario D

The table below shows the net annual return of an investment. After two years, the ARR (%) for this investment is

• 90%

• 70%

• 40%

• 20%

Statement 1: ‘External growth requires a business to integrate with another business that is located in a different country.’

Statement 2: ‘Organic growth requires a business to use its own resources to expand its size.’

Read statements 1 and 2 and select the correct option from the following options.

• Statement 1 is true. Statement 2 is true.

• Statement 1 is true. Statement 2 is false.

• Statement 1 is false. Statement 2 is true.

• Statement 1 is false. Statement 2 is false.

The diagram below shows the original breakeven chart for a product. (Refer to Figure 2) The product’s fixed costs then decrease and its variable costs per unit increase such that, at its current output of 100 units, the total costs are still the same, as shown by point X. Which one of these statements is correct?

• Its break-even output falls and its margin of safety increases.

• Its break-even output increases and its margin of safety falls.

• Its break-even output and its margin of safety remain the same.

• Its break-even output remains the same and its margin of safety increases.

Statement 1: ‘Usually there is a negative correlation between changes in consumers’ incomes and changes in the quantity demanded of a product.’

Statement 2: ‘Usually there is a positive correlation between changes in the price of a competitor’s product and changes in the quantity demanded of a product.’

Read statements 1 and 2 and select the correct option from the following options.

• A Statement 1 is true. Statement 2 is true.

• B Statement 1 is true. Statement 2 is false.

• C Statement 1 is false. Statement 2 is true.

• D Statement 1 is false. Statement 2 is false.