A business will make a profit if it:
A - OCR - GCSE Business - Question 5 - 2020 - Paper 1
Question 5
A business will make a profit if it:
A. ends the year with a positive bank balance
B. exceeds its break-even quantity
C. has costs that are greater than its reven... show full transcript
Worked Solution & Example Answer:A business will make a profit if it:
A - OCR - GCSE Business - Question 5 - 2020 - Paper 1
Step 1
A. ends the year with a positive bank balance
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Answer
While ending the year with a positive bank balance may indicate some level of financial healthy, it is not a direct indicator of profit since cash flow can be affected by various factors beyond profitability.
Step 2
B. exceeds its break-even quantity
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Answer
This is the correct answer as exceeding the break-even quantity means that total revenues are greater than total costs, directly leading to profit.
Step 3
C. has costs that are greater than its revenues
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Answer
This scenario indicates a loss rather than a profit since costs exceeding revenues means the business is incurring losses.
Step 4
D. pays off all of its debts
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Answer
Paying off debts is a financial obligation that does not directly contribute to profit. A business can still have profit while having outstanding debts.
