Lesson 1.4.4b
1.4.4b Role of a business plan in minimising risk and obtaining finance Quiz: Pearson Edexcel Business, Unit 4
20 questions
In partnership with Revision Ninja
Lesson 1.4.4b, Role of a business plan in minimising risk and obtaining finance: 20 multiple choice questions for the Pearson Edexcel GCSE Business (1BS0), Unit 4: Making the business effective, written with Revision Ninja.
Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.
The 20 questions
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How does a business plan primarily help to minimise risk for an entrepreneur?
- Hiring extra managers
- Insuring factory buildings
- Borrowing more money
- Testing assumptions beforehand
-
What do lenders check when reviewing cash-flow and profit forecasts in a plan?
- Daily staff attendance
- Founder qualifications
- Office decorating style
- Loan repayment ability
-
How does a business plan help an entrepreneur to successfully obtain finance?
- Demonstrating thorough market research
- Showing founder signatures
- Naming office pets
- Listing personal hobbies
-
What is the key benefit of identifying a long break-even period in a business plan?
- Arranging extra finance
- Cancelling all product lines
- Reducing staff numbers
- Stopping all marketing
-
What major financial risk does a business plan help to avoid initially?
- Tax liability
- Exchange rates
- High inflation
- Cash shortage
-
What is the best action when actual sales fall far below forecast sales?
- Ignore variance
- Close immediately
- Increase prices
- Review assumptions
-
What is a main limitation of using forecasts in a business plan?
- They are illegal
- They cost millions
- They guarantee profit
- They are estimates
-
Why do prospective investors inspect the marketing section of a business plan?
- To check customer understanding
- To inspect fire doors
- To count office desks
- To check printer ink
-
What is a key benefit of planning a business before it starts trading?
- Reduces costly mistakes
- Eliminates all taxes
- Removes competition
- Guarantees high profits
-
What should an owner do if a business plan shows early cash outflows exceeding inflows?
- Stop production
- Arrange finance
- Increase dividends
- Pay bonuses
-
What information in a business plan is most attractive to potential investors?
- Staff uniforms
- Office location
- Expected return
- Logo design
-
Which risk can be identified early through a business plan's market research?
- Office rent rises
- Insufficient demand
- High corporation tax
- Poor weather
-
Why should a comprehensive business plan include a range of different scenarios?
- To delay product launches
- To confuse rival firms
- To prepare for outcomes
- To increase tax bills
-
What is the main risk if a business plan identifies no sources of finance?
- Excessive taxation
- Failing to launch
- Legal penalties
- Instant bankruptcy
-
What makes a business plan most convincing to a bank?
- Guaranteed sales
- Realistic forecasts
- Vague estimates
- Zero expenses
-
How is a business plan used to minimise risk after trading begins?
- Monitoring monthly variances
- Shredding the document
- Increasing output
- Ignoring cash flow
-
Why is a cash-flow forecast vital even if a business is expected to be profitable?
- Profits are illegal
- Taxes require cash
- Sales are zero
- Timing of cash
-
What is an advantage of a written business plan over a verbal plan?
- Can be shared
- Takes longer
- Costs more
- Harder to read
-
What is the main purpose of a sales forecast in a business plan?
- Hiring staff
- Calculating tax
- Estimating revenue
- Pricing shares
-
What does a business achieve when it reaches its break-even point?
- High turnover
- No profit
- Maximum sales
- Quick expansion
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