Business finance test questions

1

Jen has decided to invest £2,500 in her sister’s company. Her sister has set up a proof reading company checking student essays in university. She has agreed to lend her the money on the principle she will take 25% of her profits for the next two years. The company makes £15,000 profit in Year 1 and £35,000 in Year 2. How much money does Jen make?

2

A company buys stock at £13,123 and sells it at £20,000. How much profit does it make on this stock?

3

A café took £50,000 last year. This table shows the café’s expenditure. Did the café make a profit or loss, and by how much?

Table showing business cost by Detail and Amount

4

A factory pays £12.80 for the materials and labour to make a dress. The supermarket wants to purchase the same dress for £20. The supermarket wants to make 25% profit. What will they need to sell the dress for to make a 25% profit?

5

How much is the percentage loss if a company buys stock for £1,500 but only manages to sell it for £1,200?

6

The manager of a jewellery company buys 10 pairs of bracelets for £3.20 each from the manufacturer. Find the percentage profit if he sells them for £4.80 each.

7

Questions 7 - 10 are for Intermediate and Higher tier

£500 is invested by a company into another company and the money appreciates by 5% a year. What is the value of the investmment after three years?

8

The value of assets a company has is £23,000 and this is set to devalue by 5% annually for two years. By how much have the assets depreciated?

9

Dylan has applied for a loan of £5,000 which has a representative APR of 4%. On application to the personal APR, he is offered 5.2%. Geraint has applied for a loan of the same amount but is offered the representative APR.

What is the difference in the amount of interest Dylan has to repay compared to Geraint, if they both pay back the loan after one year?

10

A savings account has a quoted interest rate of 10% that pays interest on a quarterly basis. What is the annual equivalent rate (AER) of this account?