Business Studies

Test
Time allowed: 1 hour
1. Alex established The Better Toy Store (TBTS) which is a children’s toy shop. TBTS has three
shops in Singapore. Two of the shops are located in busy shopping malls and the third is located
at the Jewel Changi Airport. TBTS has a website for customers looking to buy toys online. TBTS
selects toys to sell that are excellent for play, value, design and quality. All TBTS toys are
environmentally friendly. When the business grows, Alex is considering to invite shareholders
who are interested to contribute into his business.

(a) Multiple choice questions

(i)Which one of the following is a financial aim for a business? Profit

Survival
A Survival Growth
Market share
B Challenge Revenue
C Social objectives
D Personal satisfaction

(ii) Which one of the following is a benefit of being a franchisee? Networks

Social objectives
A Being able to choose your own suppliers Personal satisfaction
Independence and control
B Selling an established brand Challenge

C Not having to pay interest on a bank loan

D Having complete control of the business

(iii) Which one of the following types of business ownership would usually be formed by a business
of two solicitors? lawyer

A Sole trader

B Partnership

C Public corporation

D Public limited company

Wholesales - large amount

Retails - each item/unit
(iv) Which one of the following sectors would a retail outlet operate in?

A Primary

B Secondary Activity -----1. Primary (Farming, foresting, fishing, mining)

2. Secondary (Manufacturing)
C Tertiary 3. Tertiary (Shop, Show room, Supermarket)

D Quarternary

(v) What is an appropriate form of business for a self-employed online shop?

A Multinational

B Public limited company Public limited company - Private

C Social enterprise (Charity

D Sole trader

(b) Define the term primary sector. [1] It provides raw materials for secondary sector/ manufacturing business.
(c) Define the public corporation. [1] means a business owned by public sector to provide service.
(d) Define the term personal savings. [1]
(e) State one example of business in a secondary sector. [1] car manufacturer/ Furniture maker/

(f) TBTS predicts that its $727 million sales will grow by 3.2% next year.
Calculate the predicted sales for next year. You are advised to show your working.[2]
(g) Explain one advantage of being a sold trader. [3] (f) = $727 m + (727x3.2%) =727+ 23.234 = $750 m
(h) Discuss whether Alex should convert his business to a private limited company. Make a clear
judgement in your evaluation. [6] =727 x 103.2% = $750.26 m

2. During the first three years, The Better Toy Store (TBTS) aimed to survive among the
competing stores in the toy market. Now TBTS focuses on the profit and growth of the business.
So, it is planning to introduce a new range of toys for four-year-old children. It will need to carry
out some research from its customers, including children and parents, to find out what they
want.

(a) Multiple choice questions.

(i) Which one of the following is a benefit of buying a franchise?

A The franchisor provides training to the franchisee (100+ (100x20%)

B A franchisee pay a lower rate of Value added tax (VAT) $100 ------ $120
C The franchisor pays the franchisee to set up in business

D A franchisee makes all his/her own decisions

4.7 m ------ 100%
0.2 m ------ ? 0.2/4.7 x100 = 4.26 m
 4.7 m ---100%
4.9 m --- ? 4.9/4.7 x100 = 104.26 %
Increase percent = 104.26-100= 4.26%
(ii) Figure 1 shows the number of online customers using TBTS in 2017-2018.

0.2 m increase

100%

Which is the percentage increase, to two decimal places, of online customers from 2017 to 2018?

A 2.00% Net Changes in amount

Increase percent = x100
B 4.08%
Original amount
C 4.26%

D 4.70% 0.2 m
= x100 = 4.26%
(iii) The transfer of public sector resources to the private sector4.7 m
is called

A Nationalization

B Rationalisation

C Segmentation

D Privatisation

(iv) Which of the following is a disadvantage of a private limited company?

A Shareholders have limited liability adv

B Owners have to share the profit with outsiders

C It can take time to transfer shares to a new owner ( permission of other shareholders)
D Control could be lost to outsiders

(v) Which of the following is a business stakeholder?

A Supplier

B Police officer

C Lawyer

D Tax collector

(b) Define the term economies of scale. [1] lower average cost due to large production

(c) Define the venture capital. [1]

(d) Define the term sold trader. [1]

 (e) State one financial aim of a business. [1]

(f) Of TBTS’s 43000 employees, 70% are women.

Calculate the number of women working at TBTS. You are advised to show your working. [2]

(g)Explain one advantage of setting up a partnership business. [3]

(h) How might a business like TBTS change its objective as it evolves? Provide two reasons in your
analysis. [6]

1. (h) When the business of selling of toys grows, Alex is considering to convert as a private limited company. It has a
benefit of limited liability for shareholder, means the liabilities of the business is only limited to the amount of invested in the
business. So they can protect their personal assets. However, inviting other shareholders will lose controls of business
activities for Alex. He cannot make own decisions on locating the additional toys shops. In my opinion, Alex should covert
his business as private limited company since he could raise more capital required to expand additional toys shops.