Term
| Explain the difference between start-up costs and running costs. |
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Definition
| Start-up costs are costs used to start a business and running costs are costs that keep the business running. |
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Term
| List 2 typical start-up costs a hairdresser might face. |
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Definition
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Term
| Indentify 2 typical running costs that an artist would have to pay for. |
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Definition
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Term
| Mr. Patel owns a curry restaurant. Give an example of one direct cost and on indirect cost. |
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Definition
Direct cost: Silverware
Indirect cost: Rent |
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Term
| Indentify and explain 2 problems of using a break-even chart. |
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Definition
| They are used assuming that all goods produced by the firm are actually sold and the graph doesn't show the possibility that stocks may build up if not all goods are sold. |
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Term
| Identify three sources of funds that could be used if a business is suffering from cash-flow problems. |
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Definition
Bank loans
Overdraft
Trade credit |
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Term
| Explain 2 differences between a short-term loan and an overdraft. |
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Definition
| Overdraft can be cheaper than loans. |
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