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LET’S PRACTICE
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12. T F Profit margin is a means of determining projected inventory levels.
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13. Donna has been operating a successful yoga studio for two years now. She wants to expand her business. Which two ways can businesses can expand? Suggest one way she can expand her core business and one way she can diversify her business. _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ 14. What is a profit margin and how is it calculated? _ ____________________________________________________________________ _ ____________________________________________________________________ _ ____________________________________________________________________ 15. Larry recently bought a tool manufacturing business. Soon after taking possession of the business, he received a notice from the landlord that the lease was expiring. This comes as a big surprise to him. Now he has to spend a lot of money to move the business to a new site. What pre-purchase process is designed to prevent these kinds of “surprises?” PRODUCT PREVIEW a. licensing b. interview c. integration d. due diligence
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16. LLC stands for
a. Liability Labor Corporation b. Limited Liability Company c. Loan Liable Company d. Limited License Corporation
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17. Allison’s delivery service business had revenues of $22,543 this month. Her expenses were $15,110. What is her profit margin?
a. 12.5% b. 22.5%
c. 75% d. 32%
THE 21st CENTURY STUDENT’S GUIDE TO FINANCIAL LITERACY 237
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