Lesson 2.6.1

2.6.1 Business plan Quiz: OCR Business, Unit 2

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 2.6.1, Business plan: 20 multiple choice questions for the OCR Business (H431), Unit 2: Business objectives and strategy, written with Revision Ninja.

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The 20 questions

  1. What is the main purpose of creating a comprehensive business plan?

    • Replacing financial accounts
    • Guaranteeing high profits
    • Eliminating all risk
    • Securing external finance

  2. Which section of a business plan details expected revenue, cash flow, and profit forecasts?

    • Executive summary
    • Financial plan
    • Marketing strategy
    • Operational plan

  3. How does writing a business plan directly benefit an entrepreneur?

    • Guarantees market dominance
    • Removes opportunity costs
    • Eliminates external uncertainty
    • Clarifies strategic focus

  4. Which part of a business plan provides a concise overview of the entire business proposal?

    • Appendix section
    • Executive summary
    • Market analysis
    • Financial projection

  5. In the Plan-Do-Review cycle, which stage involves assessing actual performance against initial targets?

    • Review
    • Plan
    • Execute
    • Do

  6. How does continuous application of the Plan-Do-Review cycle improve business performance?

    • Eliminates operational costs
    • Prevents external changes
    • Enables continuous improvement
    • Guarantees zero mistakes

  7. What is the primary purpose of conducting a formal strategic review?

    • Filing annual taxes
    • Designing logo graphics
    • Evaluating long-term strategy
    • Calculating daily wages

  8. What term describes a scenario where potential outcomes are known and can be assigned probabilities?

    • Strategic failure
    • Total uncertainty
    • Quantifiable risk
    • Unquantifiable risk

  9. What term refers to a situation where future outcomes cannot be predicted or assigned probabilities?

    • Trade payoff
    • Uncertainty
    • Break-even point
    • Quantifiable risk

  10. In business investment, what is the typical relationship between risk and potential reward?

    • Inverse relationship
    • Positive correlation
    • No relationship
    • Negative correlation

  11. What is the definition of opportunity cost in business decision-making?

    • Cost of raw materials
    • Next best alternative foregone
    • Total financial loss
    • Future expected revenue

  12. A business faces operational disruption due to machine failure. What type of cause is this?

    • Market risk
    • External uncertainty
    • Internal uncertainty
    • Quantifiable certainty

  13. An unexpected change in government interest rates affects borrowing costs. What type of uncertainty is this?

    • Internal uncertainty
    • Strategic alignment
    • External uncertainty
    • Operational risk

  14. A firm uses £50,000 retained profit to buy machinery instead of earning 4% interest. What is the opportunity cost?

    • £48,000 net profit
    • £2,000 interest foregone
    • £52,000 total investment
    • £50,000 machinery cost

  15. A retailer expands its product range to reduce reliance on a single product. Which strategy is this?

    • Market penetration
    • Cost leadership
    • Retrenchment
    • Diversification

  16. A firm fails to hedge against foreign currency fluctuations and suffers massive losses. What caused this?

    • Strategic review
    • Capital expenditure
    • Opportunity cost
    • Poor risk management

  17. An entrepreneur invests personal savings into a start-up without guaranteed returns. What risk is this?

    • Operational stability
    • Sunk reward
    • Opportunity gain
    • Financial risk

  18. Why do bank managers demand a detailed business plan before granting a loan?

    • To secure voting shares
    • To avoid corporation tax
    • To assess repayment ability
    • To guarantee higher profits

  19. A sudden natural disaster damages a factory in an area with no historical data. How is this classified?

    • Internal risk
    • Quantifiable risk
    • Unquantifiable risk
    • Budgeted variance

  20. How does high economic uncertainty affect a firm's sales forecasting accuracy?

    • Guarantees revenue growth
    • Eliminates forecast variances
    • Reduces forecast accuracy
    • Increases forecast accuracy

All OCR Business quizzes