1ai) B

1aii) C

1aiii) A

1aiv) C

1av) 2489.6 Ks

1avi) D

b) A person who is interested in the business

c) Data which is numerical which is measured by a value.

d) One method is by employees trying to sell shoes to potential customers.

e) GPM = GP/R X 100

500,500/570,000 X 100 = 87.80%

f) One way is by lowering your variable costs, therefore this would mean that the business might
need to change to a cheaper supplier, as a result the business would have more profit available
as suppliers might have reduced costs for their raw materials.

g) Backyard Shoez has 3 shops in busy malls in Nairobi, Kenya, Backyard Shoez has direct
competition with other shoe shops, thus Backyard Shoez would be in a highly competitive retail
market, therefore customer satisfaction is key to success in Nairobi, Kenya. Backyard Shoez
can have more loyal customers, therefore Backyard Shoez will have repeated sales, as a result
Backyard Shoez will have more revenue, finally Backyard Shoez will have an increase in
revenue, thus Backyard Shoez will have more profit available.

One more importance is that Backyard Shoez will be able to spread more brand awareness due
to word of mouth from customers, therefore Backyard Shoez will be able to attract more
potential customers, hence Backyard Shoez will have more sales, this will also increase profits
for Backyard Shoez as revenue will increase, finally Backyard Shoez will have a higher market
share in the retail market in Nairobi, Kenya.

2a) One fringe benefit is a purchase discount.

2b) One benefit is that Backyard Shoez can save costs.

2c) One reason is that
2d) One method is by using a billboard in popular areas in Nairobi, Kenya, therefore a business
can spread more brand awareness, as a result a business can attract more potential customers
as the billboard is more visible to a large scale of audience, finally a business can have more
sales, hence more revenue will be available to a business.

2e) One way is by adding a new feature, therefore the product would be more appealing to
customers , as a result a business can attract more customers, this will increase sales and
revenue of the business.

2f) Bonus payments can be made depending on the performance of the employee.
Job enrichment is when the employees give more responsibility to employees.

Bonus payments being a financial motivator can encourage employees to be more productive
and work hard, however the employees might not always be able to attend a high number of
production which might demotivate the employees in the long run.

Backyard Shoez should choose option 2 because Backyard Shoez will be able to motivate more
employees while not increasing costs, therefore Backyard Shoez will save costs, as a result
Backyard Shoez will be cost effective. This will also give more responsibility to employees of
Backyard Shoez, this will increase productivity due to more motivation, thus making Backyard
Shoez less time consuming.

One disadvantage of Backyard Shoez using job enrichment is that if Backyard Shoez gives too
much responsibility to the employees, the employees might feel overworked, therefore
productivity might reduce within Backyard Shoez, due to tired employees, as a result this will
reduce the quality of shoes of Backyard Shoez.

Overall, i think that option 1 will be more beneficial to Backyard Shoez employees, this is due to
Backyard Shoez being a shoe business, therefore the workers of Backyard Shoez would be
working on wages, as a result Backyard Shoez would motivate more workers as the workers of
Backyard Shoez might not be paid highly.

3a) When the remaining cash from total revenue - total costs.
3b) One impact of an increased interest rate is that the cost of borrowing would increase for
Backyard Shoez, as a result Backyard Shoez would have less profits.
3c) BEP = FC/SP-VC

100,000/4,300-3,500 =

3d) Break even is the amount of units needed to sell inorder to make a profit.

One benefit is that Backyard Shoez can choose the right price to sell their shoes as Backyard
Shoez can see how many units are needed to break even, therefore Backyard Shoez will be
able to have a lower break even point depending on the price, as a result Backyard Shoez will
make a profit faster, this will also help Backyard Shoez to be expand more shoe product ranges
for men and children.

One disadvantage is that Backyard Shoez might not have demand if their shoes are priced high,
as a result Backyard Shoez will have less sales, therefore Backyard Shoez will have less
revenue and profits for their shoe product ranges.

3e) Backyard Shoez should choose option 1 as crowdfunding is highly accessible on the
internet, therefore Backyard Shoez can raise a high level of finance due to more access to
variety of investors, as a result Backyard Shoez will have more capital available, hence,this
capital can be used to expand Backyard Shoez shoes product range, finally this will help
increase customer demand as the highly competitive retail market changes frequently due to
new trends in the retail market.

One disadvantage is that crowdfunding websites are very competitive as there are a lot of
startup businesses who need capital to start their business idea, therefore Backyard Shoez
might not be able to attract any investors due to lack of interest in Backyard Shoez, hence
Backyard Shoez would be wasting their time, finally this will lead to inefficiency for Backyard
Shoez.

4a) 3,200 - 2,400 = 800

800/2300 x 100 = 34.78%

35%

4b) Profitability ratio for backyard shoes can give important information regarding the profit
made by Backyard Shoez in the current year and previous years, this will also help Backyard
Shoez to compare the progress and determine the financial position thus can plan the
expansion and growth of the business.

Furthermore profitability ratios are important information for the investors as they can determine
the level of return risk in investing in Backyard Shoez.

4c) Primary is research that is research that is done first hand.

One importance is that Backyard Shoez can get feedback from the public from surveys,
questionnaires and etc, therefore Backyard Shoez can improve their shoes, this will also help
meet customer demand and wants, hence Backyard Shoez can attract more potential
customers, this will help increase sales and revenue for Backyard Shoe, finally Backyard Shoez
will be able to have a higher market share in the shoe market.

One reason it is not important for Backyard Shoez to use primary research is that the public
might not give honest feedback as they might be biased to a certain question in the survey, as a
result Backyard Shoez will be wasting their time on collecting feedback from the public, hence
Backyard Shoez would be ineffective with their time usage. Backyard Shoez will also have an
increase in costs due to incorrect data from the feedback of the public, finally Backyard Shoez
will have less profit due to excess costs thus Backyard Shoez will be ineffective with their costs.

Overall i think that it is important for Backyard Shoez to use primary market research due to
Backyard Shoez needing to understand the shoe market this is due to the shoe market being a
dynamic market, as a result Backyard Shoez will need to constantly update their shoe product
portfolio for men and children, finally Backyard Shoez will meet customer demand thus
increasing sales and revenue for Backyard Shoez while increasing the customer base for
Backyard Shoez.