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WorksheetsEdexcel A2 Theme 3: Business Decisions and Strategy
Total questions: 92
Worksheet time: 46mins
What does QSF stand for?
Quality Sales Figures
Quantitative Sales Forecasting
Quick Sales Forecast
Quarterly Sales Finance
What is the primary purpose of time-series analysis?
To reduce advertising costs
To make predictions about possible future sales levels
To calculate profit margins
To measure employee productivity
In a 3-period moving average, where is the calculated average placed?
Next to the first year
Next to the last year
Next to the middle year
At the bottom of the table
What does a scatter graph with positive correlation indicate?
As one variable increases, the other decreases
There is no relationship between variables
As one variable increases, the other also increases
The data is unreliable
What is extrapolation in sales forecasting?
Removing outliers from data
Stretching data along a line of best fit to predict the future
Calculating the average of all data points
Comparing two different datasets
Which of the following is a limitation of quantitative sales forecasting?
It uses too many numbers
Past sales figures are no guarantee of future sales
It requires too much staff training
It is only suitable for large businesses
What type of data does quantitative sales forecasting use?
Qualitative opinions
Customer feedback
Numerical and statistical data
Employee surveys
In a 4-quarter moving average, what must the probabilities from all quarters equal?
0.5
1.0
4.0
100
What does a line of best fit show on a scatter graph?
The exact future sales figures
General trends over time
The company's profit margin
Employee performance
Which business function benefits from QSF data for organizing staff levels?
Marketing
Finance
Human Resources
Legal
What does negative correlation on a scatter graph suggest about advertising spend vs. sales?
More advertising leads to more sales
More advertising leads to fewer sales
Advertising has no effect on sales
The relationship is unclear
Calculate the 3-period moving average: Year 1 = 100, Year 2 = 200, Year 3 = 300
150
200
250
300
What external factor can make historical sales data unreliable?
New office furniture
Weather changes or events like COVID
Staff uniforms
Website updates
What does correlation measure?
The total sales value
The relationship between two sets of variables
The number of customers
The profit margin
Which statement about moving averages is correct?
They highlight short-term fluctuations
They smooth out data to identify trends
They only work with annual data
They replace the need for forecasting
What does NPV stand for?
New Product Value
Net Present Value
National Profit Variation
Net Projected Volume
What does the payback method calculate?
Total profit over the project lifetime
How long it takes to recover the initial investment
The percentage return on investment
The discount rate
What does ARR stand for?
Annual Return Rate
Average Rate of Return
Asset Revaluation Ratio
Accounting Revenue Record
A project costs £100,000. Year 1 income is £60,000, Year 2 is £50,000. What is the payback period?
1 year
1.8 years
2 years
2.5 years
What is a good ARR percentage compared to?
1% inflation rate
5% savings account rate
10% tax rate
15% growth rate
What does NPV account for that ARR does not?
Tax rates
The time value of money
Employee costs
Market competition
In NPV calculations, what happens to future money?
It increases in value
It stays the same value
It decreases in value (discounted)
It is ignored
What is a limitation of the payback method?
It is too complex
It only looks at speed of payback, not profitability
It requires specialist software
It can only be used for projects over 10 years
For NPV calculations, what must be provided in the exam?
The company's tax rate
The discount table
The inflation rate
The interest rate
If Project A has ARR of 12% and Project B has ARR of 18%, which should be chosen?
Project A
Project B
Both equally
Neither
What does Year 0 represent in investment appraisal?
The first year of profit
The initial investment cost
The final year
The break-even year
Which investment appraisal method is the most complex?
Payback
ARR
NPV
They are all equally complex
A project generates total returns of £150,000 over 5 years, with initial cost £80,000. What is the average annual profit?
£10,000
£14,000
£30,000
£70,000
What shape represents a decision point on a decision tree?
Circle
Square
Triangle
Diamond
What shape represents a chance node on a decision tree?
Circle
Square
Triangle
Diamond
What must probabilities from a chance node always add up to?
0.5
1.0
10
100
What type of approach is a decision tree?
Qualitative
Quantitative
Subjective
Observational
If Success probability is 0.7, what is the Failure probability?
0.2
0.3
0.7
1.0
Project A: Success (0.3) = £20m, Failure (0.7) = -£2m. What is the expected value?
£4.6m
£6m
£18m
£20m
If a project costs £1m and the expected value is £3.8m, what is the net expected value?
£1m
£2.8m
£3.8m
£4.8m
What is indicated by // on a decision tree branch?
Optional activity
Critical path/task
Expensive option
Low probability
What type of data are decision trees typically based on?
Future predictions
Historical data from the business
Competitor analysis
Market research
Which decision tree option should be chosen when comparing expected values?
The lowest value
The highest value
The median value
The average value
What is a limitation of decision trees?
They use too few numbers
They are based on predicted data and estimates
They cannot show multiple options
They require no business knowledge
When should project costs be deducted in decision tree calculations?
Before calculating probabilities
After calculating expected values
Never
Only for failed outcomes
Decision trees help businesses to make which type of decisions?
Daily operational decisions
Strategic investment decisions
Employee recruitment decisions
Inventory ordering decisions
If a crop has 0.6 chance of £50,000 profit and 0.4 chance of £10,000 profit, with £10,000 cost, what is the net profit?
£20,000
£24,000
£30,000
£34,000
What does CPA stand for?
Critical Performance Analysis
Cost Planning Assessment
Critical Path Analysis
Corporate Project Appraisal
What do CPA diagrams show?
Company profits
Network of tasks in a project with timings
Employee performance
Market share
What does EST stand for in CPA?
Estimated Start Time
Earliest Start Time
End of Standard Time
Expected Scheduled Time
Where is the EST shown on a node?
Top left
Top right
Bottom left
Bottom right
What does LFT stand for?
Last Finish Time
Latest Forecast Time
Latest Finish Time
Long-term Forecast Time
Where is the LFT shown on a node?
Top left
Top right
Bottom left
Bottom right
How do you calculate EST when moving forward through the network?
Subtract duration from previous EST
Add duration to previous EST
Multiply previous EST by duration
Divide previous EST by duration
How do you calculate LFT when moving backwards through the network?
Add duration to next LFT
Subtract duration from next LFT
Multiply next LFT by duration
Divide next LFT by duration
When two nodes meet calculating EST, which value do you take?
The shortest
The longest
The average
The first one
When two nodes meet calculating LFT, which value do you take?
The longest
The average
The shortest
The last one
What is the formula for calculating total float?
EST - LFT - Duration
LFT - Duration - EST
Duration - EST - LFT
EST + LFT + Duration
What does float time represent?
Critical tasks
Free/spare time in the schedule
Project costs
Worker hours
What is a benefit of using CPA?
It eliminates all project risks
Parallel activities can be scheduled to save time
It guarantees project success
No planning is needed
What does SOCI stand for?
Statement of Company Income
Statement of Comprehensive Income
Summary of Corporate Investment
Standard Operating Cost Indicator
What was the SOCI previously called?
Balance Sheet
Cash Flow Statement
Profit and Loss Account
Income Statement
What does SOFP stand for?
Summary of Financial Performance
Statement of Financial Position
Standard Operating Financial Procedure
Statement of Fiscal Planning
What was the SOFP previously called?
Profit and Loss Account
Trading Account
Balance Sheet
Cash Flow Statement
What is the formula for Gross Profit?
Revenue + Cost of Sales
Revenue - Cost of Sales
Revenue x Cost of Sales
Revenue ÷ Cost of Sales
What is the formula for Operating Profit?
Gross Profit + Expenses
Gross Profit - Expenses
Revenue - Expenses
Cost of Sales - Expenses
What are current assets?
Assets that last more than one year
Assets that will pay back in under 1 year
Long-term investments
Company vehicles
Which of these is a non-current (fixed) asset?
Cash
Stock/Inventory
Debtors
Machinery
What are current liabilities?
Debts due within 1 year
Debts due after 1 year
Company assets
Share capital
What formula represents the balance sheet equation?
Assets = Liabilities
Assets = Liabilities + Capital
Assets + Liabilities = Capital
Assets = Capital - Liabilities
What is the formula for the Current Ratio?
Current Assets ÷ Current Liabilities
Current Liabilities ÷ Current Assets
Current Assets - Current Liabilities
Current Assets + Current Liabilities
What is the ideal Current Ratio range?
0.5:1 to 1:1
1.5:1 to 2:1
2.5:1 to 3:1
3:1 to 4:1
What is the formula for the Acid Test Ratio?
(Current Assets + Inventory) ÷ Current Liabilities
Current Assets ÷ Current Liabilities
(Current Assets - Inventory) ÷ Current Liabilities
Current Assets ÷ (Current Liabilities - Inventory)
Why is inventory excluded from the Acid Test Ratio?
It is too valuable
It may perish, be obsolete, or not worth stated value
It is already sold
It is a liability
What is the formula for the Gearing Ratio?
(Non-current Liabilities ÷ Capital Employed) × 100
(Capital Employed ÷ Non-current Liabilities) × 100
Current Liabilities ÷ Capital Employed
Non-current Liabilities - Capital Employed
A business with gearing over 50% is considered:
Low geared (low risk)
Highly geared (high risk)
Medium geared
Perfectly balanced
What does ROCE stand for?
Rate of Capital Expenditure
Return on Current Equity
Return on Capital Employed
Ratio of Corporate Earnings
What is the formula for ROCE?
(Revenue ÷ Capital Employed) × 100
(Operating Profit ÷ Capital Employed) × 100
(Gross Profit ÷ Capital Employed) × 100
(Net Profit ÷ Total Assets) × 100
Current Assets = £200,000, Current Liabilities = £100,000. What is the Current Ratio?
0.5:1
1:1
2:1
3:1
Current Assets = £150,000, Inventory = £30,000, Current Liabilities = £100,000. What is the Acid Test Ratio?
0.8:1
1.2:1
1.5:1
1.8:1
What is a limitation of ratio analysis?
It uses too many calculations
The SOFP is just a snapshot of one day
It requires specialist software
It can only be used by accountants
Non-current Liabilities = £40,000, Capital Employed = £100,000. What is the Gearing Ratio?
20%
30%
40%
50%
Operating Profit = £50,000, Capital Employed = £250,000. What is the ROCE?
5%
10%
20%
25%
What is the formula for Labour Productivity?
Number of Workers ÷ Total Output
Total Output ÷ Number of Workers
Total Output × Number of Workers
(Total Output - Number of Workers) × 100
What does labour productivity measure?
Employee satisfaction
The efficiency of the workforce
The number of employees
The cost of wages
What is the formula for Labour Turnover?
(Number Leaving ÷ Average Employees) × 100
(Average Employees ÷ Number Leaving) × 100
Number Leaving - Average Employees
Average Employees - Number Leaving
What does high labour turnover indicate?
Happy employees
Staff are leaving frequently (potential problems)
High productivity
Good recruitment
What is the formula for Absenteeism?
(Days Lost ÷ Total Possible Days) × 100
(Total Possible Days ÷ Days Lost) × 100
Days Lost - Total Possible Days
Total Possible Days + Days Lost
Total Output = 500,000, Number of Workers = 250. What is Labour Productivity?
200
500
1,000
2,000
20 days lost to absence, 1,000 total possible days. What is Absenteeism?
1%
2%
5%
10%
Which is a financial reward to increase motivation?
Flexitime
Commission
Job rotation
Empowerment
What is empowerment?
Reducing employee wages
Giving employees authority to make decisions
Increasing working hours
Removing employee benefits
What is a consultation strategy?
Ignoring employee opinions
Asking employees for their opinion on work matters
Making all decisions without input
Reducing staff numbers
What is employee share ownership designed to do?
Reduce company profits
Motivate employees and give them stake in success
Eliminate management
Increase taxation
Which financial ratio measures a company's ability to pay short-term obligations?
Inventory Turnover
Return on Capital Employed
Profit Margin
Current Ratio
What is the main advantage of using decision trees in project management?
They reduce project costs automatically
They eliminate all risks
They help visualize possible outcomes and choices
They guarantee project success
Which of the following is a non-financial method to increase employee motivation?
Commission
Job rotation
Profit sharing
Bonus payments
