DP Business Management Questionbank

Define the term capital expenditure.

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

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

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

With reference to AK Bank, describe two features of for-profit microfinance providers.

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

Discuss whether LB should implement proposal 1 or proposal 2.

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 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.

Recommend whether Henri should choose Option 1 or Option 2.

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

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

State two appropriate external sources of finance that RE could use to modernize its gas stations.

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).

Explain the impact of price changes by foreign competition on HA’s break-even point.

Define the term current assets.

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

Using Table 2, calculate the following forecasted figures for 2018:

net profit after interest and tax.

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).

Define the term intangible asset.

(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 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.

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.

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).

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

Construct a fully labelled balance sheet for RE as of 31 December 2021.

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

Explain one way VT could improve its liquidity.

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.

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

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.

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

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.

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.

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).

Recommend whether Henri should choose Option 1 or Option 2.

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

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

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).

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. 

Discuss whether LB should implement proposal 1 or proposal 2.

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.

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

Explain one method MM could use to improve its liquidity.

With reference to Option 1, for KT, explain the relationship between the product life cycle, investment, profit and cash flow.

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.

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).

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).