0450_w12_qp_11
A paper of Business Studies, 0450
Questions:
5
Year:
2012
Paper:
1
Variant:
1
Login to start this paper & get access to powerful tools
1
For Examiner’s Use Durban Dragons is a big football club. Recently fewer people have been watching its matches and ticket revenue is falling. Some people say that ticket prices for matches are too high and should be reduced. The club has high fixed costs and needs to improve its cash flow. The club directors have been trying to gain sponsorship and a number of businesses are very interested. What is meant by ‘cash flow’? Give two examples of fixed costs that a business like a football club would incur. Example 1: Example 2: Identify and explain two ways the cash flow of Durban Dragons could be improved. Way 1: Explanation: Way 2: Explanation: For Examiner’s Use Identify and explain two reasons why businesses might want to sponsor football clubs like Durban Dragons. Reason 1: Explanation: Reason 2: Explanation: Do you think if Durban Dragons reduce ticket prices for matches this will increase revenue? Justify your answer.
5. Financial information and decisions  →  5.2. Cash-flow forecasting and working capital
Open
2
For Examiner’s Use Gresham Textiles manufactures high quality clothing. Production is labour intensive. Managers are paid more than production line workers in the factory. The business is investing in automated machinery. The management also wants to introduce lean production methods. What is meant by ‘labour intensive’? Identify two suitable sources of finance that Gresham Textiles could use to finance the investment in automated machinery. Source 1: Source 2: Identify and explain two reasons why factory managers are paid more than production line workers at Gresham Textiles. Reason 1: Explanation: Reason 2: Explanation: For Examiner’s Use Identify and explain two ways lean production methods could reduce costs in the factory. Way 1: Explanation: Way 2: Explanation: Do you think that a change to automated methods of production would benefit customers of Gresham Textiles? Justify your answer.
4. Operations management  →  4.1. Production of goods and services
Open
3
For Examiner’s Use Table 1 shows the Balance Sheet for company D at the end of 2010 and 2011. Table 1: Company D Balance Sheet [$m] Fixed Assets Current Assets Current Liabilities Net Assets Long-term Liabilities Shareholders’ Funds Capital Employed The accounts also showed that the net profit of company D was $80m in 2010 and $120m in 2011. What is meant by ‘capital employed’? Calculate company D’s current ratio in 2011. The directors are planning further expansion of the company. Identify and explain two benefits to company D of raising finance by selling more shares. Benefit 1: Explanation: Benefit 2: Explanation: For Examiner’s Use Identify and explain a reason why the following stakeholders would be interested in using company D’s accounts. Creditors’ reason: Explanation: Employees’ reason: Explanation: Shareholders’ reason: Explanation: Do you think the performance of company D in 2011 has improved? Justify your conclusion using the data provided.
5. Financial information and decisions  →  5.5. Analysis of accounts
5. Financial information and decisions  →  5.1. Business finance: needs and sources
Open
4
For Examiner’s Use Jergen Cosmetics makes a range of beauty products for women in country A. ‘We are a market orientated company’ said Klaus, the Managing Director. ‘One of our business objectives is to increase sales turnover. We have just set up our own website and increased our marketing budget. Our country’s economic growth is forecast to be 4% next year and this will guarantee our company’s profitability.’ What is meant by ‘market orientated company’? What is meant by ‘Managing Director’? Identify and explain two benefits to Jergen Cosmetics of setting business objectives. Benefit 1: Explanation: Benefit 2: Explanation: For Examiner’s Use Identify and explain two benefits to Jergen Cosmetics of having its own website. Benefit 1: Explanation: Benefit 2: Explanation: Do you think that economic growth in country A will lead to increased profitability for Jergen Cosmetics? Justify your answer.
1. Understanding business activity  →  1.5. Business objectives and stakeholder objectives
3. Marketing  →  3.4. Marketing strategy
Open
5
For Examiner’s Use Greenfield manufactures furniture. The company imports wood and other raw materials from several countries. Marcos is the Managing Director of Greenfield. Marcos said that his company was affected by import quotas and changes in exchange rates. He said: ‘Greenfield has to buy its raw materials from other countries as there are no timber resources in our own country.’ What is meant by ‘import quota’? Identify two ways that Greenfield’s business might harm the environment. Way 1: Way 2: Identify and explain two ways in which changes in exchange rates could cause problems for Greenfield. Way 1: Explanation: Way 2: Explanation: For Examiner’s Use The Government in Greenfield’s country is introducing consumer protection laws. Identify and explain three ways in which Greenfield’s business could be affected by these new laws. Way 1: Explanation: Way 2: Explanation: Way 3: Explanation: Greenfield’s management is thinking of expanding the business by taking over another furniture manufacturer. Do you think this is a good idea for Greenfield? Justify your answer.
6. External influences on business activity  →  6.2. Environmental and ethical issues
1. Understanding business activity  →  1.3. Enterprise, business growth and size
Open