Financial information and decisions

Paper labels are an unofficial, independently authored grouping, applied only where a question's own format genuinely matches a real paper convention (such as IB Mathematics AA's non-calculator/calculator split). They do not reproduce any exam board's real paper numbering or mark allocation, and uncertain questions are labelled general practice instead.

• 1A product sells for $20. Variable cost per unit is $12. Fixed costs are $4,000 per month. Calculate the monthly break-even output in units.✓ ReviewedPaper 1 styleMedium4 marksCalculator+
• 2Using the same product (break-even output 500 units), the business actually sells 650 units in a month. Calculate its margin of safety.✓ ReviewedPaper 1 styleEasy3 marksCalculator+
• 3A business has revenue of $80,000 and cost of sales of $50,000 for the year. Calculate its gross profit margin.✓ ReviewedPaper 1 styleMedium4 marksCalculator+
• 4Explain why a profitable business could still run out of cash and be unable to pay its suppliers.✓ ReviewedPaper 1 styleEasy2 marksNo calculator+
• 5Which is an example of a short-term source of finance for a business? A A 10-year bank loan B Issuing new shares C A bank overdraft D Selling a fixed asset such as land✓ ReviewedPaper 1 styleEasy1 marksNo calculator+
• 6Explain one advantage to a business of using retained profit, rather than a bank loan, to finance a new investment.✓ ReviewedPaper 1 styleEasy2 marksNo calculator+
• 7In March, a small business forecasts cash inflows of $6,000 and cash outflows of $7,500. Its opening cash balance on 1 March is $2,000. Calculate its closing cash balance at the end of March.✓ ReviewedPaper 1 styleMedium4 marksCalculator+
• 8A retailer's cash flow forecast shows a negative closing balance for two consecutive months. Analyse two actions the business could take to improve its cash flow position.✓ ReviewedPaper 2 styleEasy3 marksNo calculator+
• 9A profitable private limited company needs $200,000 to open a new branch. It can take out a long-term bank loan, or issue more shares to existing shareholders. Recommend one option using two relevant factors.✓ ReviewedPaper 2 styleEasy3 marksNo calculator+