Which action below would improve Lucy’s Jewels cash flow, assuming sales remain the same?
Select ONE answer:
- Buy cheaper raw materials
- Increase the amount spent on advertising
- Add additional products to the range sold
- Employ additional sales staff
Show the workings to arrive at your answer, and explain and justify your reasons:
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This multiple choice question is suitable for Business Studies KS4 & KS3 classes
The answer is 1:
- Buy cheaper raw materials – is correct because buying cheaper raw materials for the products reduces cash outflow.
- Increase the amount spent on advertising is not correct because it would initially increase cash outflows.
- Add additional products to the range sold is not correct because it would initially increase cash outflows.
- Employ additional sales staff is not correct because it would initially increase cash outflows.
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