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CAIE IGCSE Business Studies 5.3.1 What Is Profit and Why It Is Important Questions

Practise profit questions by defining profit, calculating forecast profit and explaining why profit supports business objectives.

Syllabus
2027–2029
Course
Business 0264

Exam points

  • Define profit as total revenue minus total costs after costs are subtracted.
  • Calculate and compare profit for alternative services or business options.
  • Explain why profit matters as a reward for risk, source of finance or success measure.

CAIE IGCSE Business Studies 5.3.1 What Is Profit and Why It Is Important Questions question 1

[Maximum number: 6]

KPX manufactures computers. The business imports 60% of its raw materials. The Operations Director is considering ways to use lean production methods in KPX's factory. The Finance Director is reviewing KPX's financial data to calculate the value of its expenses. An extract is shown in Table 1.1.

Table 1.1

Table 1.1

Explain two reasons why profit is important for a business. Which reason is likely to be the most important? Justify your answer.

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