FINANCE
Is a mortgage a short-term or long-term source of debt finance?
Long-term debt finance.
Give ONE example of an input into the operations process.
Materials, labour/human resources, facilities/equipment or information.
What is a target market?
The specific group of customers a business aims its marketing towards.
What is training?
Developing employees’ skills and knowledge so they can perform their jobs effectively.
What is the main purpose of a business?
To provide goods and/or services to satisfy customer needs and wants, generally while achieving business objectives.
What source of finance allows a business to purchase goods from a supplier now and pay later?
Trade Credit
Is a haircut primarily a good or a service output?
Service
Which “P” of the marketing mix deals with how a product gets from the business to the customer?
Place
A business fills a vacancy by promoting one of its existing employees. Is this internal or external recruitment?
Internal recruitment.
To provide goods and/or services to satisfy customer needs and wants, generally while achieving business objectives.
Employees.
A business has an opening cash balance of $4,000, cash inflows of $12,000 and cash outflows of $10,500. Calculate the closing cash balance.
5500
A business checks finished products and removes defective items before they reach customers. Name the quality-management approach.
Quality Control.
A luxury fashion brand launches a new product at a very high price before gradually reducing the price. Name the strategy.
Price skimming.
Give ONE disadvantage of external recruitment compared with internal recruitment.
Examples: more expensive, takes longer, applicant is unfamiliar with the business, greater uncertainty about suitability.
A business changes from a sole trader to a company as it grows. Give ONE potential advantage.
Examples include limited liability, greater access to capital, perpetual succession or easier transfer of ownership.
Explain the difference between gross profit and net profit.
Gross profit is sales revenue minus COGS. Net profit is what remains after other business expenses are deducted from gross profit.
What is the difference between Quality Control and Quality Assurance?
QC checks/inspects outputs to detect defects; QA uses systems, standards and procedures to prevent quality problems and achieve consistency.
A business pays an influencer to demonstrate its product to followers on social media. Which element of the marketing mix is being used, and why?
Promotion — the business is communicating with potential customers to inform/persuade them.
Explain ONE way employee motivation could affect business performance.
Higher motivation may increase productivity, quality/customer service and retention, potentially reducing costs and improving performance.
A business's costs increase because the Australian dollar falls and its imported materials become more expensive. Is this primarily an internal or external influence? Explain.
External — exchange-rate movements occur outside the business but can affect its costs and profitability.
A business owns a valuable building but does not have enough cash to pay suppliers due this week. What financial problem does it have? Explain.
A liquidity problem. Liquidity is the ability to meet short-term obligations as they fall due; owning valuable non-current assets does not necessarily provide immediate cash.
A factory has frequent defects. Management introduces documented production procedures, staff training and regular audits. Identify the quality approach AND explain why it should reduce defects.
Quality Assurance. It establishes consistent systems and procedures designed to prevent quality problems rather than simply finding defects after production.
A product has strong sales, many competitors and the business uses reminder advertising and product variations to protect market share. Which stage of the product life cycle is most likely?
Maturity.
A business is losing experienced employees to competitors. Recommend ONE HR strategy and explain TWO benefits it could provide.
Possible strategies include improved remuneration/rewards, career development, training, flexible work or recognition. Benefits could include increased motivation, reduced turnover, lower recruitment costs and retention of skills.
A business has excellent marketing and rapidly increasing sales, but customers complain about late deliveries and inconsistent product quality. Which business function is most likely causing the problem, and what should management investigate?
Operations. Management should investigate transformation processes, capacity, quality management, inventory/supply processes and efficiency.