Question 1

When starting a new business, the first step should be to:

a. write a business plan

b. Find a location for the business

c. Seek startup capital

d. Name the business

Question 2

A new clothing store has opened and business is slow. Prices are in line with the competition, they have advertised in the local paper, and there appears to be enough staff. What would you recommend they do?

Lower the price to attract customers.

Renovate the space.

Hire more staff.

Increase advertising and promotion efforts.

Question 3

Company X has monthly fixed costs of $60,000 and a unit variable cost of $15. How many units do they have to sell at $30 to break even?

2,000

4,000

6,000

1,000

Question 4

A(n) ___________ is a financial statement that provides a summary of revenues and expenses over a period of time.

Balance Sheet

Cash Flow Statement

Income Statement

Inventory Report

Question 5

Firm X purchased $30,000 worth of inventory when they opened for business, adding to the $20,000 included in the acquisition. At the end of the first quarter, inventory was valued at $23,000. What was cost of goods sold (COGS) for the quarter?

$50,000

$27,000

$23,000

$30,000

Question 6

Company Y thinks they can increase sales by lowering the price of their product. If they currently sell 6000 units a quarter at $32, how many more units will they have to sell at $30 to get the same amount of revenue?

1,200

600

400

100

Question 7

A new boutique hotel has 96 rooms and needs to hire staff to clean the rooms. If a typical employee can clean a room in about half an hour, how many employees will they need each day to clean the hotel in an 8-hour shift?

8

12

5

6

Question 8

If a new full-time employee is paid $40,000 a year, and taxes and insurance add 20% of wages to the cost, what is the total cost of the employee to the company?

$42,000

$60,000

$48,000

$40,000

Question 9

Firm X sold 10,000 units of their product last month at a price of $50. If it costs them $30 to produce each unit, what is their gross margin for the month?

$500,000

$300,000

$100,000

$200,000

Question 10

Company Y has issued 10,000 shares of stock, which have a current market value of $20 per share. The company has a dividend yield target of 4% per annum. How much will they have to pay in dividends this quarter to meet the target?

$1,200

$800

$2,000

$400