Question detail
QuickFix Repairs serves small retailers while taking a loan; the case evidence includes capacity utilisation of ?9,036, sales of 931 units, and a 7% change in costs or demand. Which option best applies Evaluate suitable sources of finance for new and established businesses?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Sources of finance
Question
- A. Use sources of finance to judge net profit margin, customers impact, and the business objective in Finance sources and suitability.
- B. Give only a definition of Sources of finance without using the case evidence.
- C. Treat fixed and variable costs as identical and ignore the effect on customers.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use sources of finance to judge net profit margin, customers impact, and the business objective in Finance sources and suitability.
Explanation
This option works because Use sources of finance to judge net profit margin, customers impact, and the business objective in Finance sources and suitability. The case evidence gives ?10,536, 931 units, and 7%, 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 customers, or ignore the business objective.
Common mistake
Finance sources and suitability common mistake 1
Giving a vague answer instead of directly addressing: Evaluate suitable sources of finance for new and established businesses..
Answer by clearly explaining how to evaluate suitable sources of finance for new and established businesses..
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