Category: Business

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1. What is the primary goal of a business?

A. Make employees happy
B. Maximize shareholder value
C. Solve a problem and create value
D. Reduce competition

Correct Answer: C
Explanation:
All successful businesses start by solving a real problem or fulfilling a need. Value creation comes first—profits follow.

2. Which financial statement shows a company’s profitability over a period of time?

A. Balance Sheet
B. Income Statement
C. Cash Flow Statement
D. Statement of Retained Earnings

Correct Answer: B
Explanation:
The income statement shows revenue, expenses, and profits over time, making it the best tool to measure profitability.

3. True or False:

Brand loyalty increases customer lifetime value.

Correct Answer: True
Explanation:
Customers who stick with a brand spend more, refer others, and require less marketing investment—raising their lifetime value.

4. What does ROI stand for?

A. Return On Investment
B. Rate Of Income
C. Revenue Over Industry
D. Real Operational Insight

Correct Answer: A
Explanation:
ROI measures the financial return on money invested. Higher ROI means more efficient use of resources.

5. Which of the following is a competitive advantage?

A. High employee turnover
B. A unique product your competitors cannot easily copy
C. Increasing debt
D. Frequent price changes

Correct Answer: B
Explanation:
A competitive advantage must be difficult to imitate—unique value, technology, or branding gives a business power in the market.

6. What is “market segmentation”?

A. Dividing the market into groups with similar needs
B. Lowering prices across all markets
C. Buying out competitors
D. Expanding internationally

Correct Answer: A
Explanation:
Segmentation helps businesses target specific groups more effectively, increasing relevance and conversion rates.

7. True or False:

Cash flow is more important than profit in day-to-day operations.

Correct Answer: True
Explanation:
A company can be profitable on paper but still fail if it runs out of cash to pay bills, suppliers, or employees.

8. What is the “break-even point”?

A. When revenue equals expenses
B. When the company starts making millions
C. When debt is eliminated
D. When customer growth slows down

Correct Answer: A
Explanation:
Break-even occurs when a business covers all its costs. Past this point, every new sale contributes to profit.

9. Which leadership style focuses on empowering employees and building a shared vision?

A. Autocratic
B. Transactional
C. Transformational
D. Lazy leadership

Correct Answer: C
Explanation:
Transformational leaders inspire teams by motivating them, creating vision, and encouraging innovation.

10. Which marketing strategy builds long-term customer relationships?

A. Hard selling
B. Customer Relationship Management (CRM)
C. Price gouging
D. Viral marketing only

Correct Answer: B
Explanation:
CRM focuses on personalized communication, loyalty programs, and customer care—key to long-term relationships.

11. True or False:

A company’s mission statement describes how it accomplishes its goals.

Correct Answer: False
Explanation:
A mission describes what the company does.
A vision describes where the company is going and how it gets there.

12. What is “scalability”?

A. Ability to cut costs
B. Ability to grow without reducing quality or increasing costs dramatically
C. Ability to hire more people
D. Ability to raise prices

Correct Answer: B
Explanation:
A scalable business can grow rapidly while maintaining efficiency—like software, digital products, or automated systems.

13. Which pricing strategy involves setting initial prices low to attract customers?

A. Price skimming
B. Penetration pricing
C. Premium pricing
D. Competitor-matching pricing

Correct Answer: B
Explanation:
Penetration pricing helps new businesses enter highly competitive markets quickly by offering attractive low prices initially.

14. What is a KPI?

A. Key Performance Indicator
B. Known Profit Index
C. Key Price Increase
D. Knowledge Performance Insight

Correct Answer: A
Explanation:
KPIs measure important performance metrics—like sales growth, customer retention, profit margin, or delivery time.

15. True or False:

High customer acquisition cost (CAC) can hurt business growth.

Correct Answer: True
Explanation:
If it costs more to acquire a customer than they spend, the business loses money and becomes unsustainable.

16. What is the purpose of a SWOT analysis?

A. Evaluate competitors’ salaries
B. Analyze project timelines
C. Identify Strengths, Weaknesses, Opportunities, Threats
D. Review year-end taxes

Correct Answer: C
Explanation:
SWOT gives leaders a full view of internal capabilities (strengths/weaknesses) and external conditions (opportunities/threats).

17. Scenario:

Your product sells well, but customers complain about shipping delays. What should you fix first?
A. Raise prices
B. Invest in better logistics
C. Launch new advertising
D. Reduce product features

Correct Answer: B
Explanation:
Fixing the customer’s pain point—slow delivery—will increase satisfaction, reviews, and repeat business.

18. A “target audience” is:

A. Anyone who sees your ad
B. People most likely to buy your product
C. Competitors
D. Business partners only

Correct Answer: B
Explanation:
Marketing only works when it focuses on the specific group of people who are most likely to purchase.

19. True or False:

Diversifying income streams reduces business risk.

Correct Answer: True
Explanation:
Multiple revenue streams protect the business if one product, platform, or market slows down.

20. Which is not a common business model?

A. Subscription
B. Freemium
C. One-time purchase
D. Telepathic transfer

Correct Answer: D
Explanation:
The first three are widely used. Telepathic transfer… not yet! (Maybe in 2050 😄)