Question detail
Harbour Hire serves repeat customers while raising prices; the case evidence includes unit contribution of ?2,125, sales of 720 units, and a 34% change in costs or demand. Which option best applies Explain how exchange rates can affect profits and sales for businesses that export?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
Globalisation
Question
- A. Use sales, profit, exchange rates to judge gross profit margin, suppliers impact, and the business objective in Exchange rates.
- B. Give only a definition of Globalisation without using the case evidence.
- C. Treat internal and external finance 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 sales, profit, exchange rates to judge gross profit margin, suppliers impact, and the business objective in Exchange rates.
Explanation
The answer is commercially strongest because Use sales, profit, exchange rates to judge gross profit margin, suppliers impact, and the business objective in Exchange rates. The case evidence gives ?3,625, 720 units, and 34%, 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 suppliers, or ignore the business objective.
Common mistake
Exchange rates common mistake 1
Giving a vague answer instead of directly addressing: Explain how exchange rates can affect profits and sales for businesses that export..
Answer by clearly explaining how to explain how exchange rates can affect profits and sales for businesses that export..
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