Question detail
SwiftServe serves commuters while opening a second outlet; the case evidence includes net profit margin of ?9,005, sales of 670 units, and a 38% change in costs or demand. Which option best applies Explain how changes in interest rates affect businesses that use overdrafts and loans?
Try the question, check the answer, then read the explanation to understand the curriculum point.
At a glance
MCQ
Type
practice
Style
Topic
The economic climate on businesses
Question
- A. Use interest rates, loan, overdraft to judge gross profit margin, suppliers impact, and the business objective in Interest rates.
- B. Give only a definition of The economic climate on businesses 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 interest rates, loan, overdraft to judge gross profit margin, suppliers impact, and the business objective in Interest rates.
Explanation
The answer is commercially strongest because Use interest rates, loan, overdraft to judge gross profit margin, suppliers impact, and the business objective in Interest rates. The case evidence gives ?10,505, 670 units, and 38%, 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
Interest rates common mistake 1
Giving a vague answer instead of directly addressing: Explain how changes in interest rates affect businesses that use overdrafts and loans..
Answer by clearly explaining how to explain how changes in interest rates affect businesses that use overdrafts and loans..
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