Question detail
BrightBake serves small retailers while taking a loan; the case evidence includes capacity utilisation of ?6,379, sales of 454 units, and a 20% change in costs or demand. Which option best applies Explain consequences of cash flow problems and effects of positive cash flow?
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 flow to judge break-even output, employees 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 margin and markup as identical and ignore the effect on employees.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use cash flow to judge break-even output, employees impact, and the business objective in Cash flow forecasting and interpretation.
Explanation
The answer is commercially strongest because Use cash flow to judge break-even output, employees impact, and the business objective in Cash flow forecasting and interpretation. The case evidence gives ?7,879, 454 units, and 20%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse margin and markup, miss the employees, or ignore the business objective.
Common mistake
Cash flow forecasting and interpretation common mistake 1
Giving a vague answer instead of directly addressing: Explain consequences of cash flow problems and effects of positive cash flow..
Answer by clearly explaining how to explain consequences of cash flow problems and effects of positive cash flow..
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