EDEXCEL BUSINESS A LEVEL PAPER 2 (THEME 2 & 3) QUESTIONS WITH CORRECT ANSWERS VERIFIED A+ LATEST UPDATE

EDEXCEL BUSINESS A LEVEL PAPER 2 (THEME 2 & 3) QUESTIONS WITH CORRECT ANSWERS VERIFIED A+ LATEST UPDATE Retained profits - correct answers-profits that the owners have reinvested into the business after paying costs and taxes Owners' funds - correct answers-money put in by the owners themselves Sale of assets - correct answers-a one-off way to raise money, generally used during financial struggles Benefits of owners funds - correct answers-Avoids interest on loans Owners keep complete control Disadvantages of owners funds - correct answers-If it fails after remortgaging, they could lose their house Limit to amount raised Short term finance examples - correct answers-overdrafts for daily expenses Medium term finance examples - correct answers-loans, hire purchase, trade credit, debt factoring used to pay for repairs, paid back after 1-5 years Long term finance examples - correct answers-issuing shares, debentures, mortgages, grants used to pay for major expenditure, paid back over many years Selling assets - correct answers-Can sell machines, buildings, land Limited buyers Advertising costs Sold cheaply Loans - correct answers-High interest rates Usually requires security in the form of assets which will be taken away if they don't make the repayments Needs regular updates Grants - correct answers-No repayment May be recalled if conditions aren't met May not cover full amount Hire purchase / leasing - correct answers-Must pay deposit and monthly