Business Studies Multiple Choice Question – 28 January 2022

The home of multiple choice questions for all your KS3, KS4 and KS5 Business Studies, Economics and Accounting requirements.

Business Studies
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Bubbly Drinks manufactures a wide range of fizzy drinks that are sold around Staffordshire.

Its most popular drink is still the original Bitter Lemonade, which is a cash cow.

A cash cow is important to Bubbly Drinks because it?

Select ONE answer:

  1. generates a significant amount of revenue
  2. is new on the market
  3. has a high market share and a high rate of growth
  4. generates all of Bubbly Drink’s profits

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

  1. Correct – Cash cows are mature products with a high but stable market share/low growth. Cash cows are important because they can be ‘milked’ for cash/revenue. Bubbly Drinks bring out new flavours of fizzy drinks every year and their development is funded by the profits from the cash cow.
  2. Not correct – products which are new on the market are called question marks/problem child and it is uncertain as to how successful they will be.
  3. Not correct – cash cows do not have a high rate of growth as their growth tends to be slow and steady over time.
  4. Not correct – cash cows do not generate all the profits for a business and star products such as Ginger Beer/other Bubbly Drinks drinks can also generate a significant amount of profit.

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Author: stuart001uk2014

Referral marketing, business, economics and accounting s​pecialist & corporate mentor

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