Question detail
Northline Gym serves small retailers while taking a loan; the case evidence includes capacity utilisation of ?9,746, sales of 636 units, and a 29% change in costs or demand. Which option best applies Explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants?
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 assets, government grant, share issue, trade credit to judge net profit margin, owners 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 internal and external finance as identical and ignore the effect on owners.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use assets, government grant, share issue, trade credit to judge net profit margin, owners impact, and the business objective in Finance sources and suitability.
Explanation
The option is correct because Use assets, government grant, share issue, trade credit to judge net profit margin, owners impact, and the business objective in Finance sources and suitability. The case evidence gives ?11,246, 636 units, and 29%, 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 owners, or ignore the business objective.
Common mistake
Finance sources and suitability common mistake 1
Giving a vague answer instead of directly addressing: Explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants..
Answer by clearly explaining how to explain internal and external sources of finance, including family and friends, retained profit, share issue, loans or mortgages, selling assets, overdrafts, trade credit, hire purchase and government grants..
Related flashcards
Flashcard 1 of 6
Related practice questions
Question 1 of 5
Choose an answer, get feedback, then move sideways through the set.