BUSINESS(OCT/NOV)

All of the following will help ensure that there is sufficient working capital except:

• constructing a cash-flow forecast

• injecting sufficient capital at the beginning of a business venture

• offering generous credit terms to customers

• developing a good working relationship with the bank.

Which of the following reasons is the most likely motivation for a private limited company converting to a plc?

• to benefit from limited liability

• to benefit from government financial support

• to raise capital

• to increase the divorce between ownership and control

Small firms often face problems in raising short- and long-term finance. This problem arises because:

• small firms typically have little security to offer banks in exchange for loans

• small firms do not have a separate legal identity

• small firms are typically unprofitable

• small firms face higher rates of corporation tax.

Profit satisficing is best defined as:

• aiming to achieve a small amount of profit

• aiming to achieve enough profit to keep owners happy

• using retained profit to achieve a satisfactory rate of business growth

• aiming to achieve the highest possible level of profit

Which of the following is an accurate definition of the term ‘stakeholder’?

• people or groups of people who have an interest in the success of a business

• people or groups of people who own shares in a business

• people or groups of people who have a legal responsibility for the success of the business

• the customers of a business

Which stakeholder group is most likely to view higher profits as a key objective?

• employees

• suppliers

• shareholders

• customers

When is an economy most likely to suffer from demand–pull inflation?

• during an economic recession

• when there is a rise in the value of a country’s exchange rate

• when interest rates rise

• during an economic boom

A manager who provides very little input into the work to be undertaken by workers is using which type of leadership style?

• autocratic

• democratic

• paternalistic

• laissez-faire

Which school of thought emphasises the role of monetary incentives to motivate workers?

• human relations school

• scientific management

• motivational needs theory

• process theory

Which of the following is not generally considered to be an advantage of internal recruitment?

• no need for induction training

• gives a career structure for staff at the firm

• usually quicker than external recruitment

• gives a wider choice of potential applicants