Question detail
Northline Gym serves repeat customers while raising prices; the case evidence includes unit contribution of ?4,529, sales of 149 units, and a 40% change in costs or demand. Which option best applies Complete and interpret sections of a cash flow forecast, including cash inflows, cash outflows, net cash flow, opening balance and closing balance?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Cash flow
Question
- A. Use cash inflow, closing balance, opening balance, cash outflow to judge break-even output, local community impact, and the business objective in Cash flow forecasting and interpretation.
- B. Give only a definition of Cash flow without using the case evidence.
- C. Treat internal and external finance as identical and ignore the effect on local community.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use cash inflow, closing balance, opening balance, cash outflow to judge break-even output, local community impact, and the business objective in Cash flow forecasting and interpretation.
Explanation
The answer is commercially strongest because Use cash inflow, closing balance, opening balance, cash outflow to judge break-even output, local community impact, and the business objective in Cash flow forecasting and interpretation. The case evidence gives ?6,029, 149 units, and 40%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse internal and external finance, miss the local community, or ignore the business objective.
Common mistake
Cash flow forecasting and interpretation common mistake 1
Giving a vague answer instead of directly addressing: Complete and interpret sections of a cash flow forecast, including cash inflows, cash outflows, net cash flow, opening balance and closing balance..
Answer by clearly explaining how to complete and interpret sections of a cash flow forecast, including cash inflows, cash outflows, net cash flow, opening balance and closing balance..
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