Business Math review

What is markup?

• the amount of money added to the cost to manufacture a product

• the amount of money deducted from the selling price

• he rate at which the selling price is increased

• the percentage of the original selling price

Which of the following best describes the concept of margin?

• the difference between the cost price and the selling price based on the original cost price.

• the percentage deducted from the selling price to attract customers.

• the percentage of the selling price that represents the profit made on a product.

• the amount added to the cost price to ensure a profit is made.

How is a discount rate usually expressed?

• As a fixed monetary amount.

• As a percentage of the original selling price.

• As a ratio of the cost price to the selling price.

• As a percentage of the profit margin.

What role does the discount rate play in pricing?

• It represents the total profit made on a product.

• It is a percentage of the original selling price deducted to reduce the selling price.

• It is the additional cost added to the manufacturing price.

• It determines the overall cost price of a product.

Which of the following best describes a trade discount?

• A discount given to customers for purchasing in bulk.

• A discount offered to employees of the business.

• A discount provided to retailers or wholesalers based on the list price.

• A discount given to customers for early payment of their bills.

What is a straight commission?

• A fixed salary with no additional earnings.

• A commission given as a bonus at the end of the year.

• A combination of a base salary and a percentage of sales.

• A commission based on a percentage of sales made, without any base salary.

What is the future value (FV) in the context of the time value of money?

• The interest rate applied to an investment.

• The current worth of a future sum of money.

• The value of an investment at a specific date in the future.

• The amount of money received from an investment today.

How does the frequency of compounding affect the future value of an investment?

• The frequency of compounding has no effect on the future value.

• Increasing the frequency of compounding decreases the future value.

• Increasing the frequency of compounding increases the future value.

• Future value is only affected by the initial principal, not the frequency of compounding.

Given a fixed interest rate, how would increasing the investment period affect the present value of an amount to be received in the future?

• It would increase the present value.

• It would decrease the present value.

• It would have no effect on the present value.

• It would make the present value equal to the future value.

What is a sinking fund?

• A loan paid in full at the beginning of the term

• A fund that holds a fixed amount of money without earning interest

• A fund that receives periodic payments and interest to accumulate a target amount in the future

• A savings account used for daily expensesA single lump sum deposited into an account