[a 6a rest cope 02260020 | FORM TP 2019209 MAY/JUNE 2019 CARIBBEAN EXAMINATIONS COUNCIL CARIBBEAN ADVANCED PROFICIENCY EXAMINATION* ENTREPRENEURSHIP ENTREPRENEURIAL PRACTICE UNIT 2~ Paper 02 2 hours 45 minutes 296 READ THE FOLLOWING INSTRUCTIONS CAREFULLY. 1. This paper consists of SIX mini-case scenarios, TWO ftom EACH module. 2. Answer ALL questions. 3. Write your answers in the spaces provided in this booklet. 4. Do NOT write in the margins. 5. If you need to rewrite any answer and there is not enough space to do so on the original page, you must use the extra lined page(s) provided at the back of this booklet. Remember to draw a line through your original answer, 6. Ifyou use the extra page(s) you MUST write the question number clearly in the box provided at the top of the extra page(s) and, where relevant, include the question part beside the answer. A001 DO NOT TURN THI ‘TIL YOU ARE TOLD TO DO So. Copyright © 2018 Caribbean Examinat All rights reserved, ns Council 02260020/MJ/CAPE 2019296 aot r “ 1 INSTRUCTION: Read EACH mini-case and answer the questions that follow. MODULE 1: ESSENTIALS OF BUSINESS OWNERSHIP Case 1: Choices ltongo inherited a music business from his grandfather, who registered as a sole trader. Itongo, now the ‘owner, is thinking about which form of business will best suit his plans.as he undertakes this new venture. Being cognizant of his desire to create and innovate, Itongo wants to have complete control of the business and its operations. He knew that a franchise was not a suitable option and was aware that other forms of businesses could be explored. Given his need for more capital, he thought about converting the business to a partnership with one of his colleagues who had access to capital. 1 (a) (i)_ Define the term franchise’. [2 marks] (ii) Explain why a franchise would NOT be a suitable option for Itongo. GO ON TO THE NEXT PAGE (02260020/MJ/CAPE 2019 Le TT CoE ET a aT a area eer * 7 (b) _Itongo recognizes that other types of ventures exist. He has also given consideration to a limited liability company as well as a private company. Distinguish between a ‘limited liability company’ and a “private company’. PONOT WRITEIN' 206 NOT WRITE IN THISAREA 16 marks] GO ON TO THE NEXT PAGE =| 02260020/M,/CAPE 2019 Lor 7 (©) Explain the term ‘partnership’ AND state ONE advantage that Itongo can gain from a partnership. . [4 marks} Total 15 marks ‘A001 02260020/MJ/CAPE 2019 IE GO ON TO THE NEXT PAGE E E =296 A001 rc Case 2: Formal is Normal 4 Freida operates a cook shop in her community. As a principle, she provides breakfast and lunch to 15 senior citizens daily. She is having thoughts about expanding the business and recognizes that certain legal I and regulatory requirements for businesses are necessary. These requirements include registration of the business, adhering to labour laws, tax obligations and health and safety standards. Freida wants to seck advice on whether she should register the business as a non-governmental organization or a community- based organization. As she embarks on expanding her venture, her intent is to make significant profit, support the elderly and pay minimal taxes. 2. (@)_From the ease, identify THREE actions that are necessary for Freida to legally establish her expanding business. (6) Describe EACH of the following types of organizations to Freida. (i) Sole trader ... (ii) Community-based organization ... GO ON TO THE NEXT PAGE (02260020/MJ/CAPE 2019c . ‘Non-governmental organization [9 marks] (©) Explain why Freida’s actions of feeding the elderly, though informal, can be considered a “social value’ created by the business, [3 marks] ‘Total 15 marks GO ON TO THE NEXT PAGE =! 02260020/MJ/CAPE 2019 LL206 001 Eo r “" 7 MODULE NEW VENTURE PLANNING AND CREATION Case 3: Get it Right Michael made a decision to establish a food venture, but realized that the restaurant industry can be very challenging. Given the number of competitors, it is important for him to have a robust marketing strategy, in which he pays attention to the four P’s. He also needs to assess whether the venture would be financially feasible before he makes an investment decision. 3. (a)_List THREE of the components of the four P's in marketing strategy, other than promotion. [3 marks} (b) Explain how market research can support the promotional strategy of the venture. GO ON TO THE NEXT PAGE =| 02260020/MJ/CAPE 2019r 7 (©) Describe THREE elements that are included in a financial feasibility analysis, [9 marks} ‘Total 15 marks GO ON TO THE NEXT PAGE = (02260020/MJ/CAPE 2019 Loot r = 7 Case 4: Fail to Plan — Plan to Fail ‘Askia wanted to establish a business but he was uncomfortable with the planning process. His sister Ikeela indicated that a business plan provides a clear road map for implementing business ideas. Business plans also provide information about the four main components of every venture. Askia was also encouraged to pay attention to his finances, in particularthe three main financial statements. Askia now seeks assistance, which will guide him in developing a robust business plan, 4. (a) _List the FOUR main components of operating a venture. [4 marks} (b) Outline FOUR reasons why a business plan is considered the “road map” for a business. 18 marks} GO ON TO THE NEXT PAGE, 02260020/MJ/CAPE 2019 Lt nu DO NOTWRITEIN THISAREA rea ae ogr » 1 © how the business plan assists an entrepreneur in making financial projections. TEIN TMS AREA : £ a [3 marl Total 15 marks GO ON TO THE NEXT PAGE _l (02260020/MJ/CAPE 2019T -14- er] MODULE 3: MANAGING AND GROWING THE VENTURE Case 5: Millennial Kaya, a young entrepreneur, who was bom in 2008, decided to establish a youth fashion line called N’lighten Youth Wear. Having discussed the idea with her parents, she decided that establishing an online storefront ‘would be a step in the right direction. Kaya would therefore have no need for the regular infrastructure required to run a brick and mortar operation. With an online storefront, Kaya would be able to outsource some of the processes, use offsite storage and distribution, share technology and other services and benefits. This model of an online storefront suits her targeted customers who were born during the information age. fe DO NOT WRITE IN THIS AREA 5. (a)_State FOUR benefits to Kaya, other than tracking sales results, of using a website to conduct her business. E = iru ‘PONOTWRITEIN GO ON TO THE NEXT PAGE i (02260020/MJ/CAPE 2019 Ltee r % 1 (&) Out e FOUR ways, other than outsourcing, in which e-commerce can improve the viability of Kaya’s venture. [8 marks] (© Explain how e-commerce will allow Kaya to track sales results from the business. [3 marks} ‘Total 15 marks GO ON TO THE NEXT PAGE, 02260020/MJ/CAPE 2019296 ‘oot r 6 fl Case 6: Value your Ideas Selas and her mother started a bed and breakfast business two years ago. With the increasing demand the business has been experiencing, Selas wants to expand the business. She contemplates whether this is the appropriate time to conduct a valuation on the business, given that itis in the third stage of the business ceyele, Selas makes the decision to conduct the valuation, since it would be beneficial to them as owners, as well as to any other potential investors. 6 (a) Outline THREE reasons for conducting the valuation of a business. (b) Name THREE stages of development in the business cycle. GO ON TO THE NEXT PAGE 02260020/MJ/CAPE 2019 Le L CO aman Lnn Ep Eee I pupa; SOUNDER ROOT aR RUBE IBUBE Een EET nT Tarer " 7 (©) _ Explain the third AND fifth stages in the business life cycle. {6 marks] Total 15 marks END OF TEST IF YOU FINISH BEFORE TIME IS CALLED, CHECK YOUR WORK ON THIS TEST. (02260020/MJ/CAPE 2019 =| L wn