DP Business Management Questionbank

Describe one capital expenditure and one revenue expenditure for MSS (lines 16–17).

With reference to GT, explain one advantage and one disadvantage of debt factoring.

With reference to Utopia, describe two suitable sources of finance for the 3D printers (line 60).

Outline two appropriate external short-term sources of finance for Anubis other than loans from family and friends.

Describe one disadvantage for GD of leasing.

Explain suitable sources of finance in order for Medimatters to finance the additional setup cost of $50 000 (line 92).

Refer to case study: Medimatters

Discuss two appropriate sources of finance for SD to purchase the scooters.

Define the term capital expenditure.

Define the term trade credit.

Explain two possible external sources of finance CH could use to continue production of anti-venom vaccines.

Other than a business angel (line 108), explain methods of external finance that Accord could use to increase production capacity (line 108).

Explain suitable sources of finance for Option B.

State two features of debt factoring.

State two appropriate sources of finance Ben may have used when he first opened his vegan food stall.

State two characteristics of a business angel.

Recommend whether Pablo should choose Option 1 or Option 2.

Explain one advantage and one disadvantage for MC of using venture capital to provide financial support.

With reference to MM, outline two sources of finance suitable for taking over the film studio in India (lines 144–147).

With reference to OS, explain the difference between capital expenditure and revenue expenditure.

Explain the potential impact on AXL if it implements its planned increase in trade credit period.

Explain why HA had to raise additional external finance to increase production.

With reference to RS, explain the difference between capital expenditure and revenue expenditure.

Define the term variable cost.

Calculate the change in cleaning costs per room from the introduction of the piece rate system used by Wire.

Explain one reason, other than increased sales revenue, why it is important that Gen Y generates new revenue streams.

Explain one reason, other than increased sales revenue, why it is important that Gen Y generates new revenue streams.

Define the term fixed cost.

Define the term revenue streams.

Using the financial data in Table 1, calculate the percentage of total costs that were fixed costs for last year (show all your working).

Calculate the difference between the cost for DA to make the rechargeable batteries and the cost to buy them from XL.

Explain whether an increase in total fixed costs has an impact on unit contribution.

Define the term fixed cost.

Calculate the break-even quantity for Moverse (show all your working).

Construct a fully labelled break-even chart, to scale, for Moverse if 800 employees enroll on Moverse’s training programme.

Calculate the profit or loss if 800 employees enroll on Moverse’s training programme (show all your working).

Calculate the forecasted break-even quantity per month for the IBAT (show all your working).

Refer to case study: Medimatters

Calculate the forecasted monthly profit or loss if Medimatters sells 400 IBATs per month (show all your working).

Refer to case study: Medimatters

Calculate the break-even quantity of meals that CL must sell to pay for the increase in fixed costs of $3000 to provide these meals (show all your working).

Refer to Afghan Sun case study SL/HL P1 May and Nov 2018.

Using the information in Table 3, calculate the break-even output for portable biomass sources of electricity (show all your working).

Refer to Afghan Sun case study SL/HL P1 May and Nov 2018.

Comment on the usefulness to AS of break-even analysis.

Calculate:

the total contribution of existing meals sold per month (show all your working).

Calculate:

the total profit or loss on existing meals for May 2018 (show all your working).

Calculate:

the forecast profit or loss if Jill decides to make and sell gluten-free meals (show all your working).

Calculate:

the contribution per unit of a gluten-free meal if Jill decides to buy-in the gluten-free meals (show all your working).

Calculate the break-even level of output for PF for 2019 (show all your working).

Construct a fully labelled break-even chart, to scale, for PF for 2019.

Calculate the forecasted profit if PF sells 2400 chairs in 2019 (show all your working).

Describe one limitation of a break-even analysis.

Calculate the number of dolls that DD needs to sell to achieve a profit of $4000 (show all your working).

Calculate the profit or loss in the first year if DD sells 400 dolls (show all your working).

Assuming that the quantity of dolls to be sold in the second year is 550 and costs remain unchanged, calculate the price per doll that DD would need to charge to make a $6500 profit.

Using the financial data for DuffJD for 2018, calculate the contribution per unit per item laundered (no working required).

Using the financial data for DuffJD for 2018, calculate the margin of safety (no working required).

Draw a fully labelled break-even chart for DuffJD for 2018 using the data provided.

Explain how an increase in competition may affect DuffJD’s margin of safety.

Define the term margin of safety.

Using the financial data in Table 1, calculate the break-even level of output (show all your working).

Explain how the introduction of new production methods will affect the total cost line in SSH’s break-even chart.

Calculate, for MWF, the break-even level of output for 2020.

Construct a fully labelled, to scale, break-even chart for MWF for 2020.

Explain one advantage and one disadvantage of using a break-even analysis for PP.

Using Figure 1 explain what the y axis shows.

Using Figure 1 calculate forecasted profit if sales are 25 000 units in 2021 (show all your working).

Using Figure 1 calculate the total contribution in 2021 if Hafs only sells 20 000 units (show all your working).

Explain whether an increase in total fixed costs has an impact on unit contribution.

Calculate which store made the highest net profit before interest and tax (no working required).

Using total contribution, calculate the forecasted total profit for SSL before the introduction of the new promotional strategy (show all your working).

Construct a fully labelled break-even chart for SSL for before the new promotional strategy is introduced (show all your working).

Construct a fully labelled break-even chart, to scale, for JG for 2022.

Calculate JG’s level of profit if sales are 20 000 units in 2022 (show all your working).

Explain how the changes that Jill expects in fixed and variable costs in 2023 would affect the total costs line of the break-even chart from your answer to (b).

Using the selected financial data in Table 2, calculate for SP for 2020: 

the break-even level of output (show all your working).

Using the selected financial data in Table 2, calculate for SP for 2020: 

the margin of safety (show all your working).

Using the selected financial data in Table 2, calculate for SP for 2020: 

the net profit (show all your working).

Explain how the impact of the increase in rent and the forecast increase in sales in 2021 could affect SP’s profitability.

Using the information provided above and in Table 1, calculate the total contribution per month for the production of 20 000 chocolate-filled donuts (show all your working).

Construct a profit and loss account for PP for the year ending 30 April 2017 based on the figures in Table 1 (show all your working).

Construct a forecasted profit and loss account for PP for the year ending 30 April 2018 based on the figures in Table 2 (show all your working).

Calculate the values of X and Y in Table 1 (no working required).

Construct a profit and loss account for SE for 2015 and 2016.

Calculate net current assets (working capital) for 2016 (show all your working).

Calculate the value (also known as net book value) of new machinery at 31 December 2017 using the straight line depreciation method (show all your working).

Calculate the value (also known as net book value) of new machinery at 31 December 2017 using the reducing/declining balance method, applying the industry depreciation rate of 40% per annum (show all your working).

Explain one advantage for GD of using the straight line balance depreciation method.

Using information from the table, calculate the missing figures V, W, X and Y (no working required).

Define the term current assets.

Using Table 1, calculate Fishers’s net profit before interest and tax for 2017 (show all your working).

Explain why Fishers experiences a significant increase in current assets and current liabilities from March to October.

Construct a fully labelled balance sheet for VT for the end of 2017.

Refer to the As Fair As case study (SL/HL paper 1 Nov 2018).

With reference to AFA, explain why applying appropriate principles and ethics of accounting practice is important.

Refer to the As Fair As case study (SL/HL paper 1 Nov 2018).

Define the term intangible asset.

Refer to the As Fair As case study (SL/HL paper 1 Nov 2018).

Calculate the gross profit margin of AFA for 2016 and 2017.

Refer to the As Fair As case study (SL/HL paper 1 Nov 2018).

Explain one possible reason for the trend in gross profit margin for AFA between 2016 and 2017.

(b) Using Table 1, calculate for PI:

(i) gross profit (X);

(ii) tax (Y).

(c) Using Table 1 and your calculations in (i) and (ii), construct a profit and loss account for PI.

Calculate the net profit margins for DH for 2016 and 2017.

Calculate net current assets (working capital) for DH for 2016 and 2017.

Define the term debtors.

Using information from Table 1 construct a fully labelled balance sheet for Papel for the end of October 2018.

Calculate the difference in AI’s net profit before interest and tax between 2018 and 2019 (show all your working).

Define the term retained profit.

Using the information provided and in Table 1, calculating X and Y, construct a profit and loss account for Enjuice.

Based on a target of 160 000 for the first year of production at Detox, calculate the gross profit generated by Detox.

Using the financial data in Table 1, calculate the level of profit for SSH at 2018’s level of production (show all your working).

Calculate the profit if MWF sells 3600 window fans in 2020.

Define the term retained profit.

Using Table 2, calculate X (no working required).

Using Table 2, prepare a balance sheet for the year ending 31 December 2019.

Explain the possible changes to KPJ’s balance sheet for 2019 if KPJ spent $30 000 on a new digital projector.

Calculate, for 2019, NS 507’s net profit before interest and tax (no working required).

Using information in Table 1, for JJ, prepare a profit and loss account for the budgeted figures and the actual figures
(show all your working).

Calculate TPS’ equity.

Explain one effect that the $50 000 long-term debt may have on TPS’ profit and loss account.

Calculating X and Y in Table 3, prepare a profit and loss account for WC for 2022 (show all your working).

Describe one disadvantage of using the reducing/declining balance method of depreciation.

Using the reducing/declining balance method of depreciation, calculate PB Ltd’s annual depreciation of fixed assets for 2019 and 2020. Use 5 % as the depreciation rate (show all your working).

Using the selected financial information in Table 1 and your answer from (b)(i), prepare a balance sheet for PB Ltd for 31 December 2020.

Using the straight line method, calculate the annual depreciation for each laptop (show all your working).

Comment on the usefulness to PU of the results of your calculation in part (i).

Using information in Table 1, calculate for BF stock turnover in days for 2015 (X) (show all your working).

Using information in Table 1, calculate for BF debtor days for 2016 (Y) (show all your working).

Refer to the As Fair As case study (SL/HL paper 1 Nov 2018).

(i) Calculate the inventory/stock turnover for woollen hats (show all your working).

(ii) Comment on your result in (b)(i).

Calculate the debtor days for MM at the end 2020 (show all your working).

Calculate the value of X and the value of Y in Table 1.

With reference to Table 1, explain one way in which MSS could improve cash flow.

State any two stages of the working capital cycle.

Prepare a monthly cash-flow forecast for TC for the first six months of operation.

Using the information above, prepare a fully labelled cash-flow forecast for Anubis from January to March 2018.

Comment on the predicted cash flow for Anubis for 2018.

Using the information in the table only, prepare a monthly cash flow forecast, for CL, for the first six months of operation.

Refer to Afghan Sun case study SL/HL P1 May and Nov 2018.

With reference to Table 2, describe two advantages for Su of using a cash-flow forecast.

Using Table 2, calculate the net cash flow (Z) for PI for 2019 (show all your working).

Explain the difference between profit and cash flow. 

Prepare a cash flow forecast for Las Migas for the first four months of operations.

Using the financial information in Table 1, evaluate two strategies that CM could use to improve its financial position other than changing to a just-in-time (JIT) stock control method.

Using the information in Table 1, construct a fully labelled cash flow forecast for MV for the first six months of 2021.

Define the term working capital cycle.

Prepare a monthly cash flow forecast for BB for the first four months of operation.

Explain one strategy that BB could use to significantly improve its forecasted cash flow for January 2021.

Explain strategies MM could use to improve cash flow in its palladium mine in South Africa (Table 1).

Using Table 4, calculate WC’s net cash flow for 2022 (show all your working).

Explain the difference between WC’s profit and its cash flow.

Explain strategies, in addition to redundancies, that PU could use to solve its cash-flow problems (lines 56–59).

Using Table 3 and the information provided above, prepare a monthly cash-flow forecast for LLC for the first four months of operations.

Using the information above and in Figure 1, recommend either Option 1 or Option 2 for MSS. You will find it useful to calculate the payback period for the two options.

Calculate for GT:

the payback period for the €44 million investment in new equipment based on the forecasted increase in net cash flow (show all your working).

Calculate for GT:

the average rate of return (ARR) based on an annual increase in net cash flow of €6000 and assuming an asset life of the new equipment of eight years (show all your working).

Using the information above, calculate the payback period and the average rate of return (ARR) for the 3D printing project (show all your working).

Using information from the case study, additional information above and your results from part (c), recommend whether Utopia should proceed with the 3D printing project.

Using information from Table 1 and Table 2, calculate the net present value (NPV) for the 3D printing project.

Using information from the case study, additional information above and your results from part (c), discuss whether Utopia should proceed with the 3D printing project.

For the new warehouse, using information from the table, calculate the average rate of return (ARR) (show all your working).

For the new warehouse, using information from the table, calculate the payback period (show all your working).

For the new warehouse, using information from the table below, calculate the net present value (NPV) at a discount rate of 6 % (show all your working).

Explain one disadvantage for S4U of using the NPV method of investment appraisal.

Refer to Afghan Sun case study SL/HL P1 May and Nov 2018.

Using the case study, resource and appropriate planning tools, recommend whether Su should choose Option 1, Option 2, or neither. You will find it useful to calculate the ARR for Option 1.

Evaluate the two options that KA is considering.

Using the information in Table 1, calculate for Location A the payback period (show all your working).

Using the information in Table 1, calculate for Location A the average rate of return (ARR) (show all your working).

For Kayla’s proposal calculate the payback period.

For Kayla’s proposal calculate the net present value (NPV) using a discount rate of 6 %*.

Calculate, for Option 1 the average rate of return (ARR) (show all your working).

Calculate, for Option 1 the payback period (show all your working).

Calculate, for Option 2, the average rate of return (ARR) (show all your working).

Explain one reason why Option 1 may be a less risky investment than Option 2.

Using Table 1, calculate for Option B the average rate of return (ARR) (show all your working).

Using Table 1, calculate for Option B the payback period (no working required).

Calculate the payback period if RV chooses Option 2 (show all your working).

Explain one disadvantage to RV of using the payback period method of investment appraisal.

Calculate for MM: the average rate of return (ARR) for the lithium mine (show all your working).

Using the information provided above and in Table 2, calculate the payback period for the new machine (show all your working).

Using the information provided above and in Table 2, calculate the average rate of return (ARR) for the new machine (show all your working).

Explain the usefulness to MSS of the variance analysis in Table 1.

Explain two advantages for TH of having three separate profit centres.

Explain one advantage and one disadvantage for DA of changing from function-based cost centres to the cost centres proposed by Pierre.

Using information in Table 1, for JJ, prepare a variance analysis (show all your working).

Using information in Table 1, calculate for BF current ratio for 2015 (A) (show all your working).

Referring to information in Table 1 and your calculations, explain the change in BF’s liquidity between 2015 and 2016.

Using information from the table, calculate the gross profit margin for 2015 and 2016 (no working required).

Calculate the acid test (quick) ratio for VT for 2018.

Explain one way VT could improve its liquidity.

Using information from Table 1 calculate the current ratio for Papel for the end of October 2018.

Explain one possible strategy, other than elimination of credit sales, for Papel to improve its liquidity position.

Using the information provided and in Table 1, calculate the gross profit margin (no working required).

Explain one strategy that Enjuice could use to increase its gross profit margin.

Based on a target of 160 000 for the first year of production at Detox, calculate the net profit margin of Detox.

Explain the potential impact on MV’s gross profit margin if the prices charged by its suppliers increase in the second half of 2021.

Using Table 2, calculate the current ratio for 2019 (no working required).

Calculate, for 2019, NS 507’s gross profit margin (no working required).

Using Table 1 calculate the current ratio for SF for 2020 (show all your working).

Using Table 1 suggest one reason why SF may have a liquidity problem.

Explain one method MM could use to improve its liquidity.

Calculate which store had the highest profitability (show all your working).

Calculate TPS’ return on capital employed (ROCE) (show all your working).

Explain two factors that might prevent TZ from increasing its gross profit margin.

Calculate RE’s gross profit margin (no working required).