NAMA Financial Management & Pricing 2 — Questions and Answers
Question 1: A vending operator calculates that a location generates $1,200/month in sales with a 35% cost of goods. What is the gross profit for this location?
- $420
- $780 (Correct answer)
- $865
- $1,080
Correct answer: $780
Gross profit = $1,200 × (1 - 0.35) = $1,200 × 0.65 = $780.
Question 2: Which pricing strategy sets prices based on what competitors charge rather than on internal costs?
- Cost-plus pricing
- Value-based pricing
- Competitive pricing (Correct answer)
- Penetration pricing
Correct answer: Competitive pricing
Competitive pricing (market-based pricing) sets prices relative to what competitors charge in the same market.
Question 3: In vending financial management, what does 'shrinkage' refer to?
- Reduction in machine size
- Inventory losses due to theft, spoilage, or accounting errors (Correct answer)
- Decline in consumer demand
- Decrease in route miles driven
Correct answer: Inventory losses due to theft, spoilage, or accounting errors
Shrinkage is the loss of inventory value due to theft, spoilage, miscount, or employee error.
Question 4: A vending machine has a DEX reading showing 500 units sold at an average of $1.75. What is the total reported sales figure?
- $750.00
- $875.00 (Correct answer)
- $912.50
- $1,000.00
Correct answer: $875.00
Total sales = 500 units × $1.75 = $875.00.
Question 5: Which financial document provides a snapshot of a company's assets, liabilities, and equity at a specific point in time?
- Income statement
- Cash flow statement
- Balance sheet (Correct answer)
- Accounts receivable aging report
Correct answer: Balance sheet
A balance sheet shows a company's financial position (assets, liabilities, equity) at a single date.
Question 6: An operator wants a 40% gross margin on a product that costs $0.60. What should the selling price be?
- $0.84
- $0.96
- $1.00 (Correct answer)
- $1.50
Correct answer: $1.00
Selling price = Cost / (1 - Margin) = $0.60 / 0.60 = $1.00.
Question 7: What is the primary purpose of a cash flow statement in vending operations?
- To calculate net profit margin
- To track when cash enters and leaves the business (Correct answer)
- To determine inventory turnover rate
- To set product pricing levels
Correct answer: To track when cash enters and leaves the business
The cash flow statement tracks the actual timing of cash inflows and outflows, showing a business's liquidity position.
NAMA Financial Management & Pricing 2
A vending operator calculates that a location generates $1,200/month in sales with a 35% cost of goods.
What is the gross profit for this location?