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Business planning

Case study - Quiz

1. What is the break-even level of output for taktical.com?
(Type your answer)

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2. Which of the following changes would reduce the level of break-even output for taktical.com?
(Select one answer)

(a) * Frank decides to reduce the price of the software
(b) * The software and design costs are higher than expected
(c) * Frank decides to allow people to download the software from the web site making the distribution costs lower
(d) * The cost of printing the manuals increases because of an increase in paper prices

       

3. Which of the following changes would increase the level of break-even output for taktical.com?
(Select one answer)

(a) * Advertising rates in yachting magazines are increased because of heavy demand
(b) * A promising level of sales encourages Frank to increase the price of the software
(c) * CD pressing costs fall because of a surplus in the market
(d) * Frank finds that the credit card charges for purchases from the web site are lower than he expected

       

4. Which of the following might be considered a 'below the line' form of promotion?
(Select one answer)

(a) * Advertising in yachting magazines
(b) * Direct mailing to a database of yachting people Frank has bought
(c) * Buying slots on local radio stations at coastal locations
(d) * Advertising in a trade journal for yachting businesses

       

5. Which of the following might be considered an 'above the line' form of promotion?
(Select one answer)

(a) * The development of a logo and brand image to help promote the product
(b) * Exhibiting at boat shows and other trade events
(c) * Advertising in local papers in key yachting areas
(d) * The introduction of an 'early season' discount for people buying in January or February

       

6. What is the margin of safety of taktical.com if they sell 300 units of the software?
(Type in the number of units)

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7. Which of the following would be an advantage of converting from a private limited to a public limited company?
(Select one answer)

(a) * The firm would gain limited liability
(b) * The owners would be able to maintain control over the business
(c) * There may be some divorce between ownership and control
(d) * The firm would gain access to equity markets