Question detail
EcoWash serves price-sensitive customers while using retained profit; the case evidence includes break-even output of ?5,998, sales of 403 units, and a 37% change in costs or demand. Which option best applies Calculate average rate of return?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Quantitative skills in business
Question
- A. Use average rate of return to judge labour productivity, lenders impact, and the business objective in Calculation requirements.
- B. Give only a definition of Quantitative skills in business without using the case evidence.
- C. Treat gross and net profit as identical and ignore the effect on lenders.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use average rate of return to judge labour productivity, lenders impact, and the business objective in Calculation requirements.
Explanation
This option works because Use average rate of return to judge labour productivity, lenders impact, and the business objective in Calculation requirements. The case evidence gives ?7,498, 403 units, and 37%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse gross and net profit, miss the lenders, or ignore the business objective.
Common mistake
Calculation requirements common mistake 1
Giving a vague answer instead of directly addressing: Calculate average rate of return..
Answer by clearly explaining how to calculate average rate of return..
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