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Volume of goods sold X Average selling price

Fixed Costs: any costs that do not vary directly with output ­ they exist even if a business is not producing any goods or services. E.g.

Variable Costs: costs that vary directly with the level of output e.g.…

Page 2

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Anticipate the timing and amounts of any cash shortages
Arrange financial cover for any anticipated shortages of cash.
Review the timings and amounts of receipts and payments.
Obtain loans (if the problems are long term) or overdrafts (if short term)
However, firms need to remember these are only estimates made…


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