Question detail
RiverRun Catering serves price-sensitive customers while using retained profit; the case evidence includes break-even output of ?5,686, sales of 741 units, and a 37% change in costs or demand. Which option best applies Explain risks businesses face and why all businesses face uncertainty?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Competitive environment
Question
- A. Use uncertainty, risk to judge net profit margin, lenders impact, and the business objective in Uncertainty and risk.
- B. Give only a definition of Competitive environment without using the case evidence.
- C. Treat gross and net profit as identical and ignore the effect on lenders.
- D. Choose the largest sales figure without checking costs, finance, or context.
Answer
The correct option is: Use uncertainty, risk to judge net profit margin, lenders impact, and the business objective in Uncertainty and risk.
Explanation
This option works because Use uncertainty, risk to judge net profit margin, lenders impact, and the business objective in Uncertainty and risk. The case evidence gives ?7,186, 741 units, and 37%, so the answer must explain the commercial effect rather than repeat a definition. The distractors are weaker because they confuse gross and net profit, miss the lenders, or ignore the business objective.
Common mistake
Uncertainty and risk common mistake 1
Giving a vague answer instead of directly addressing: Explain risks businesses face and why all businesses face uncertainty..
Answer by clearly explaining how to explain risks businesses face and why all businesses face uncertainty..
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