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AQA A LEVEL BUSINESS VALUATION EXAM WITH THE CORRECT ANSWERS
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AQA A LEVEL BUSINESS VALUATION EXAM WITH THE CORRECT ANSWERS
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AQA A LEVEL BUSINESS VALUATIONEXAM WITH THE CORRECT ANSWERS
Name three ways business impacts a country and its residents: -
VV VV VV VV VV VV VV VV VV VV VV VV correct
answer-Provides employment
VV VV VV
New products can enhance the lives of consumers
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Improve a country's reputation
VV VV VV
What do businesses do in the primary sector? -
VV VV VV VV VV VV VV VV VV VV correct answer-Extract or
VV VV
grow raw materials
VV VV VV
What do businesses do in the secondary sector? -
VV VV VV VV VV VV VV VV VV VV correct answer- VV
Manufacture goods using raw materials
VV VV VV VV
What do businesses do in the tertiary sector? -
VV VV VV VV VV VV VV VV VV VV correct answer-Provide
VV
services
VV
What do mission statements create? -
VV VV VV VV VV VV VV correct answer-Corporate aims
VV VV
What are the benefits of setting business objectives? - correct answer-
VV VV VV VV VV VV VV VV VV VV VV
Provide direction and can support planning and operations
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Allow a business to co-ordinate resources and ensure that all employees are
VV VV VV VV VV VV VV VV VV VV VV
working towards the same overall aim
VV VV VV VV VV VV
,What is profit maximisation? - correct answer-A business objective that
VV VV VV VV VV VV VV VV VV VV
requires a business to achieve the highest amount of profit for shareholders
VV VV VV VV VV VV VV VV VV VV VV VV
Which business objective requires a business to continue trading despite
VV VV VV VV VV VV VV VV VV
challenges in the external environment? - correct answer-Survival
VV VV VV VV VV VV VV VV VV
Which business objective requires the growth of stores or locations, sales
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value, sales volume or product range? - correct answer-Growth
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Which business objectives require a business to focus on supporting society
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through initiatives including sustainability and fair trade? - correct answer-
VV VV VV VV VV VV VV VV VV VV VV
Social, ethical and environmental
VV VV VV
What can corporate objective be broken down into? -
VV VV VV VV VV VV VV VV VV VV correct answer- VV
Functional objectives VV
Team objectives VV VV
Individual objectives VV
What is revenue? - correct answer-The income earned by a business from
VV VV VV VV VV VV VV VV VV VV VV VV
the sale of its goods and services
VV VV VV VV VV VV VV
What is the calculation for revenue? -
VV VV VV VV VV VV VV VV correct answer-number of sales x
VV VV VV VV
sales price
VV VV
What are the types of costs? -
VV VV VV VV VV VV VV VV correct answer-Variable Fixed
VV VV
What are variable costs? -
VV VV VV VV VV VV correct answer-Costs that change directly with
VV VV VV VV VV
output
VV
What are fixed costs? - correct answer-Cost that do not vary as the
VV VV VV VV VV VV VV VV VV VV VV VV VV
company changes its output
VV VV VV VV
Who argued in 1980 that a business can be a cost leader or differentiated
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but not both? - correct answer-Michael Porter
VV VV VV VV VV VV VV VV
What is profit? - correct answer-The amount of money that the business
VV VV VV VV VV VV VV VV VV VV VV VV
makes when taking into account costs
VV VV VV VV VV VV
What is the calculation for interest? -
VV VV VV VV VV VV VV VV correct answer-interest rate x the size
VV VV VV VV VV
of the loan
VV VV VV
What is the calculation for profit? -
VV VV VV VV VV VV VV VV correct answer-total revenue - total costs
VV VV VV VV VV
What do we call things like raw materials that businesses convert into
VV VV VV VV VV VV VV VV VV VV VV
outputs? - correct answer-Inputs
VV VV VV VV VV
What kind of sector do forestry businesses operate in? -
VV VV VV VV VV VV VV VV VV VV VV correct answer- VV
Primary sector VV
,What does the SMART acronym of business objectives stand for? -
VV VV VV VV VV VV VV VV VV VV VV VV correct
answer-Specific
VV VV
Measurable VV
Agreed VV
Realistic VV
Timely
Which type of costs don't change with a business' output? -
VV VV VV VV VV VV VV VV VV VV VV VV correct answer- VV
Fixed costs VV
What is a sole trader? -
VV VV VV VV VV VV VV correct answer-A single person who is the exclusive
VV VV VV VV VV VV VV
owner of a business.
VV VV VV VV
What is the term used to describe the lack of distinction between a sole
VV VV VV VV VV VV VV VV VV VV VV VV VV
trader's assets and their business' assets? - correct answer-Unlimited liability
VV VV VV VV VV VV VV VV VV VV VV
What are the advantages of sole trader business ownership? -
VV VV VV VV VV VV VV VV VV VV VV correct
answer-Easiest type of business to set up
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Sole trader is their own boss
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Sole trader decides what to do with the profit
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Easy to change the legal structure
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What are the disadvantages of sole trader business ownership? -
VV VV VV VV VV VV VV VV VV VV VV correct
answer-Unlimited liability
VV VV VV
Hard to raise finance
VV VV VV VV
Sole trader has all the responsibility
VV VV VV VV VV VV
Harder to retain good employees
VV VV VV VV
What is a partnership? - correct answer-Businesses that are owned by 2 or
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more partners that have an equal share of the profits and say in the
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decision-making process
VV VV
What are the disadvantages of partnership business ownership? - correct
VV VV VV VV VV VV VV VV VV VV
answer-Shared profits mean lower profits for individuals Unlimited liability
VV VV VV VV VV VV VV VV VV VV
Partners may disagree about business decisions
VV VV VV VV VV VV
Each partner is liable for the actions of the other partners
VV VV VV VV VV VV VV VV VV VV
Which type of limited company is where the ownership of shares is restricted?
VV VV VV VV VV VV VV VV VV VV VV VV
- correct answer-Private limited company
VV VV VV VV VV VV
Which type of limited company is where it sells share on the stock
VV VV VV VV VV VV VV VV VV VV VV VV
exchange? - correct answer-Public limited company
VV VV VV VV VV VV VV
What are the advantages partnership business ownership? - correct answer-
VV VV VV VV VV VV VV VV VV VV
More partners mean more experience and ideas
VV VV VV VV VV VV VV
Easier to raise money
VV VV VV VV
Easier to retain good employees as they can be made into partners
VV VV VV VV VV VV VV VV VV VV VV
What are the advantages of private limited companies? -
VV VV VV VV VV VV VV VV VV VV correct answer- VV
Limited liability VV VV
, The owners retain a lot of control over how the business is managed
VV VV VV VV VV VV VV VV VV VV VV VV VV
Easier to get a loan VV VV VV VV
What are the disadvantages of private limited companies? - correct answer-
VV VV VV VV VV VV VV VV VV VV VV
Finance is needs which has a lot of costs
VV VV VV VV VV VV VV VV VV
Legally obliged to publish their accounts which can be used by competitors
VV VV VV VV VV VV VV VV VV VV VV
What are the advantages of public limited companies? - correct answer-Able
VV VV VV VV VV VV VV VV VV VV VV
to raise money for investment allowing the company to grow
VV VV VV VV VV VV VV VV VV VV VV
Easier to raise capital VV VV VV VV
Limited liability VV
What are the disadvantages of public limited companies? - correct answer-
VV VV VV VV VV VV VV VV VV VV VV
Owners have little say over how the business is run
VV VV VV VV VV VV VV VV VV
Anyone is able to take over the company by buying enough shares
VV VV VV VV VV VV VV VV VV VV VV VV
Accounts must be public which can be used by competitors
VV VV VV VV VV VV VV VV VV
What is flotation? - correct answer-When firms become public companies and
VV VV VV VV VV VV VV VV VV VV VV
their shares are made available to buy
VV VV VV VV VV VV VV
Which suffix follows the name of a private limited company? -
VV VV VV VV VV VV VV VV VV VV VV VV correct
answer-Ltd
VV
What is a not-for-profit organisation? - correct answer-An organisation where
VV VV VV VV VV VV VV VV VV VV
any profit is reinvested in the business and it cannot be kept by the owners
VV VV VV VV VV VV VV VV VV VV VV VV VV VV VV
What are some types of not-for-profit organisations? -
VV VV VV VV VV VV VV VV VV correct answer- VV
Charities VV
Social enterprise VV VV
Unincorporated association VV
What does 'unincorporated association' mean? - correct answer-The
VV VV VV VV VV VV VV VV
organisation get no profit and are legally responsible for all of the
VV VV VV VV VV VV VV VV VV VV VV VV
organisation's debt The people who manage it have unlimited liability
VV VV VV VV VV VV VV VV VV VV
What are charities like Oxfam? -
VV VV VV VV VV VV VV correct answer-Not-for-profit organisations
VV VV
What is franchising? - correct answer-Where a business gives someone the
VV VV VV VV VV VV VV VV VV VV VV
right to sell its products and use its trademarks
VV VV VV VV VV VV VV VV VV
What are the advantages of franchising? -
VV VV VV VV VV VV VV VV correct answer-Low-cost way ofVV VV VV
scaling without needing lots of investment
VV VV VV VV VV VV VV
Increased brand awareness VV VV VV
Less risk of diseconomies of scale
VV VV VV VV VV
What are the disadvantages of franchising? - correct answer-Lose control
VV VV VV VV VV VV VV VV VV VV
over how franchisees operate
VV VV VV VV VV
A badly run franchise can negatively affect the brand image
VV VV VV VV VV VV VV VV VV
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