Gross profit r480 000 less operating expenses

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Gross profit R480 000 Less: Operating expenses Marketing expenses R140 000 Administrative expenses R100 000 Depreciation R 40 000 Total operating expenses R280 000 Operating income R200 000
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5 MNE3701/201 Question 7 The correct answer is 3 . Refer to page 195 in your prescribed book. Operating income R200 000 Less: Interest expense R 20 000 Earnings before taxes R180 000 Less: Income tax R 40 000 Net income R140 000 Question 8 The correct answer is 1 . Refer to page 459 in your prescribed book. The current ratio measures the liquidity of the business. The liquidity of a business depends on the availability of cash to meet maturing debt obligations in the firm. Measuring liquidity answers the question: Does the firm have or will it have in the future the resources to pay creditors when debts become due? Question 9 The correct answer is 1 . Refer to page 259 in your prescribed book. Customer relationship management (CRM) is a marketing strategy used to maximise shareholder value through winning, growing and keeping the right customers. Question 10 The correct answer is 2 . Refer to pages 283 in your prescribed book. Business analysis is the second stage in new product development. Every new idea must be carefully studied in relation to several financial considerations. Costs and revenues
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6 MNE3701/201 are estimated and analysed using techniques such as break- even analysis. Any idea which fails to show that it might be profitable is discarded. Question 11 The correct answer is 2 . Refer to page 259 in your prescribed book. The main component of physical distribution is transportation. Additional components are storage, materials handling, delivery terms and inventory management. Question 12 The correct answer is 3 . Refer to page 232 in your prescribed book. It has been estimated that 80% of all firms lease some or all of their business equipment. Three reasons are commonly given for the increasing popularity of leasing: (1) the firm’s cash remains free for other purposes; (2) lines of credit can be used for other purposes; and (3) leasing provides a hedge against equipment obsolescence. Question 13 The correct answer is 2 . Refer to page 269 in your prescribed book. An evoked set is a group of brands that a consumer is both aware of and willing to consider, as a solution to a purchase problem, is part of information search and evaluation in consumer decision-making. Question 14 The correct answer is 1 . Refer to page 292 in your prescribed book.
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7 MNE3701/201 Supply chain management is a system of management that integrates and coordinates the ways in which a firm finds raw materials and the necessary components to produce a product or service, builds the actual product or service and delivers it to customers. Question 15 The correct answer is 1 . Refer to page 294 in your prescribed book. The three main considerations in building a channel of distribution are costs, coverage and control.
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