Interdependence 90% To Be On Paper

Question 1

What are the four main functions of a business?

Answer 1

• Business operations
• Finance
• Marketing
• Human resources

Question 2

What does the interdependent nature of business refer to?

Answer 2

The links between different areas of business that affect decision making, risks and rewards, and the use of financial information.

Question 3

How do business operations and human resources interrelate?

Answer 3

The amount and type of goods or services produced link with the number and type of workers needed.

Question 4

Fill in the blank: A gardening business may need to hire more _______ to increase the number of customers it serves.

Answer 4

[gardeners]

Question 5

How can a firm that manufactures signs increase production?

Answer 5

By introducing new technology such as robots, which may require hiring more skilled specialists and fitters.

Question 6

What decision must the finance department make when a business wants to expand production by building a new factory?

Answer 6

Arrange finance, possibly by selling shares or taking out a bank loan.

Question 7

How do business operations and marketing departments interact?

Answer 7

If production increases, marketing may need to enhance advertising to sell the increased output.

Question 8

True or False: Financial information is not useful for making business decisions.

Answer 8

False

Question 9

What is Triodos Bank’s unique lending policy?

Answer 9

They only lend money to organizations for activities that have a positive social, environmental, and cultural effect.

Question 10

What percentage of customers at Triodos Bank reported being happy with the service?

Answer 10

78 percent

Question 11

What was the percentage increase in deposits at Triodos Bank in 2021?

Answer 11

138 percent

Question 12

Fill in the blank: Financial information includes revenues, costs, profit, rates of return, break-even, and _______.

Answer 12

[cash flow]

Question 13

List two factors that can affect business decisions besides financial information.

Answer 13

• New competition entering a market
• Changes in costs, including wages and material costs

Question 14

What is the significance of forecasts in business?

Answer 14

Forecasts are predictions of what may happen in the future.

Question 15

What does the term ‘records’ refer to in a business context?

Answer 15

Records show what did happen in the past.

Question 16

Identify one indicator of the performance of Triodos Bank.

Answer 16

Net profits grew by 83 percent to €50.8 million.

Question 17

What type of question is always the last question on Paper 2?

Answer 17

A 9-mark evaluation question about the interdependent nature of business.

Question 18

What is the primary focus of the evaluation question regarding Triodos Bank?

Answer 18

The quality of service provided and its impact on business performance.

Question 19

True or False: Financial information can help maximize profits and reduce the chances of losses.

Answer 19

True

Question 21

What do businesses need to consider when making decisions?

Answer 21

The impact of non-financial risk and non-financial rewards.

Question 22

What does the average rate of return (ARR) measure?

Answer 22

The percentage rate of return on investment.

Question 23

How can a business determine if its performance is sufficient?

Answer 23

By comparing its ARR with that of other businesses or potential interest earnings.

Question 24

What are two methods a business can use to increase sales revenue?

Answer 24

• Increasing the price of products
• Increasing the amount sold

Question 25

What is a potential outcome of increasing prices?

Answer 25

Usually leads to lower sales.

Question 26

What analysis can help a business decide on producing a new product?

Answer 26

Break-even analysis.

Question 27

What does a cash flow forecast indicate?

Answer 27

It shows the expected cash flow, including potential negative cash flow periods.

Question 28

What financial options might a business consider when facing negative cash flow?

Answer 28

* Overdraft * Trade credit

Question 29

What is non-financial risk to business owners?

Answer 29

Health issues due to stress and strained relationships.

Question 30

What are examples of non-financial rewards for business owners?

Answer 30

* Satisfaction of running a successful business * Being in charge * Independence * Impact on consumer choices

Question 31

What is business performance generally measured by?

Answer 31

* Sales * Profits * Rates of return

Question 32

What is financial risk?

Answer 32

The possibility of losing money from business decisions.

Question 33

What is the purpose of just-in-time production?

Answer 33

To source components as needed to avoid excessive inventory costs.

Question 34

What challenge did Vauxhall face during the COVID-19 pandemic?

Answer 34

A dramatic fall in car sales due to showroom closures.

Question 35

What issue arose when car demand picked up after the pandemic?

Answer 35

A supply chain problem related to semiconductor shortages.

Question 36

What was the impact of increased demand for electronic goods on Vauxhall?

Answer 36

Chip manufacturers shifted production away from automotive needs.

Question 37

What significant investment did Stellantis confirm for its Ellesmere Port plant?

Answer 37

€100 million.

Question 38

What should the last question on Paper 2 evaluate?

Answer 38

The interdependent nature of business.

Question 39

True or False: Just-in-time production eliminates all risks associated with inventory management.

Answer 39

False.

Question 40

Fill in the blank: A business may decide to increase profits by _______ costs.

Answer 40

reducing