Which of the following is an advantage of an entrepreneur investing their own savings into a business?

• The business is limited liability
• If the business fails, their savings are safe
• There is no cost to the business
• The entrepreneur is guaranteed a return on their investment

What is the purpose of the margin of safety?

• It allows business to calculate the difference between variable costs and fixed costs
• It allows a business to identify how many more sales it must make before it reaches profitability
• It allows business to identify how far sales can fall before a loss is made
• It allows a business to calculate the gap between sales output and total costs

Costs which fluctuate in relation to the number of products produced is known as…

• Fixed costs
• Variable costs
• Total costs
• VAT

When a business spends money to become more profitable, it is known as…

• Paying dividends
• Investment
• Profit share
• Commission

The Acme Spring and Dynamite Company buys 400 pogo sticks for £4000 and sells each one for £35. What is the unit cost?

• £35
• £14,000
• £10,000
• £10

The gap between the break-even point and the businesses current output is called…

• …the margin of safety
• …a balance sheet
• …liquidity
• …the break-even point

A business aims to increase its profitability by investing £15,000 over three years. During this time, it expects its profits to increase by a total of £24,000. What is the average rate of return?

• 16%
• 50%
• 100%
• 250%

Which of the following sources of finance is not available to a new business?

• Sale of assets
• Personal savings
• Bank loan
• Government grants

The Acme Spring and Dynamite Company buys 400 pogo sticks for £4000 and sells each one for £35. How much is the total revenue?

• £35
• £14,000
• £10,000
• £10

What term is used to show the potential profit from an investment?

• Annual percentage rate
• Scale of economy
• Investment portfolio
• Average rate of return