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2. (a) Which two of the following can be interpreted from a break even diagram? Select two answers - Edexcel - GCSE Business - Question 2 - 2021 - Paper 1
Question 2
2. (a) Which two of the following can be interpreted from a break even diagram? Select two answers. A. Insolvency B. Margin of safety C. Market share D. Net cash... show full transcript
Worked Solution & Example Answer:2. (a) Which two of the following can be interpreted from a break even diagram? Select two answers - Edexcel - GCSE Business - Question 2 - 2021 - Paper 1
Step 1
Which two of the following can be interpreted from a break even diagram?
Answer
The two interpretations from a break even diagram are:
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Margin of safety: This indicates the amount by which sales can drop before the business reaches its break-even point. It is a critical measure of risk for businesses.
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Profit: Beyond the break-even point, any sales contribute to profit, making this an essential outcome that can be derived from the diagram.
Step 2
Which two of the following are types of technology that could be used by a business?
Answer
The two types of technology that could be used by a business are:
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Digital communication: This includes various forms of communication through digital channels, crucial for modern business operations and customer interactions.
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Payment systems: These technologies facilitate transactions, enhancing the efficiency of financial operations within a business.
Step 3
Complete the table with the two missing figures.
Answer
To complete the cash-flow forecast:
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Net cash flow for June (£):
The net cash flow can be calculated using the formula:
So, for June:
Therefore, the figure for June is 4,300.
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Closing balance for May (£):
The closing balance is calculated as:
Therefore, for May:
Hence, the figure for May is 5,000.