Question detail
StyleHub serves repeat customers while raising prices; the case evidence includes unit contribution of ?6,545, sales of 100 units, and a 34% 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 gross profit margin, 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 break-even and profit 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 gross profit margin, local community impact, and the business objective in Cash flow forecasting and interpretation.
Explanation
This answer fits the scenario because Use cash inflow, closing balance, opening balance, cash outflow to judge gross profit margin, local community impact, and the business objective in Cash flow forecasting and interpretation. The case evidence gives ?8,045, 100 units, and 34%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse break-even and profit, 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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