Question detail
PeakPods serves local families while changing supplier; the case evidence includes gross profit margin of ?4,861, sales of 381 units, and a 10% 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 average order value, suppliers 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 fixed and variable costs as identical and ignore the effect on suppliers.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use cash flow to judge average order value, suppliers impact, and the business objective in Cash flow forecasting and interpretation.
Explanation
This is the best-supported choice because Use cash flow to judge average order value, suppliers impact, and the business objective in Cash flow forecasting and interpretation. The case evidence gives ?6,361, 381 units, and 10%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse fixed and variable costs, miss the suppliers, 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..
Related flashcards
Flashcard 1 of 5
Related practice questions
Question 1 of 5
Choose an answer, get feedback, then move sideways through the set.