Page 454 - Cambridge IGCSE Business Studies

IGCSE Business Studies Student CD-ROM

Section 5 – Multiple choice

1 Businesses need finance for:

A investment in other businesses
B the purchase of non-current assets

C improving their bank balance
D increasing credit to customers.

2 Which of the following is an internal source of finance?
A Debenture
B Share issue

C Retained profit
D Overdraft

3 The best source of finance for the purchase of a motor vehicle is:
A mortgage

B overdraft
C leasing

D working capital.

4 Which of the following is a benefit of internal sources of finance?

A Interest rates are low.
B It is always available.

C It is less costly than external sources.
D It is more costly than external sources.

5 An advantage of equity financing is that:
A it is available to all types of business

B it does not have to be repaid
C it has no cost to the business

D interest payments are low.

6 Micro-finance is usually for:

A entrepreneurs in developed economies who are able to borrow from banks
B when an entrepreneur needs a large amount of capital at low interest rates
C entrepreneurs in developing economies who are unable to borrow from
other lenders

D established businesses in developing economies.

© Cambridge University Press 2014 IGCSE Business Studies Section 5 – Multiple choice 1