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1 Paolo wants to start up b . t a.w,bQ].e..s.aler.
~"'l •
Paolo knows the packaa. usines~ making cakes. He plans to sell all of his products o financial and
sales data. An extra t f ging f?r his p~oduct'swilrbe important. He has p~epa.red s~me wdfunding
as a source of fi c roHm th1 s data 1s shown in Table 1.1. Paolo is considering using cro
inance. e knows the business will also need working capital.

Table 1.1
Extract from Paolo's financial and sales data
Average price per cake
$6
Average cost per cake z z
$4 c:;
0::
aex:
Forecast average number of cake sales per day 50 ~ .~
Cl) en
~
~ ?;
i
(a) Define 'working capital'. W • W
!:: t::
................ .......:..:.fi ~te:....viwuq. .Nr.:.o.fj'·Rl.P.u.~ir1erJ ..;........•· •····· ········ ·· ·· i ~
6z 5z
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0
0
Cl

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······················································· ............ ................................ ....................................... . [2]
2 z
c5
a: a:
a
(b) Calculate the average revenue per day. Show your working.
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Working: ...... ............................................. .S.J?.l. ~.?.: .. '.2-00. ..~ .····················· ~ :i:
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I- I-

······································..................................~O..-:-.i.o.Q .~ .9 .Q..................... ......

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Final answer. ................. . 4. -l-O()................................................................................... [2]
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2

(c) Outline two reasons why packaging will be important for Paolo's business.
r WM 0

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Reason 1: .... ..\().~ ···· ~···~ f f l.Y.\A ..~ •····~ ~·~ ··· 6
a:

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Reason 2: ...:.\().. .. ~ ...tlN)h).fYl.t/t8 .. -1-.M ... \k..W.....~....~ .......... .
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. ... . ......................... . . ......... .......... . . . ~~n.~... .. ............ .... ... . ... .... . ..
·············································· ······························ ··· ·························· ·································· [4]

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(d) Explain one advantage and one disadvantage to Paolo's business of using
-
a source of finance .

Advantage: ........ N~..~ ..................................................................................

···················· ····················0······························ ·················································· ·········· ·········
Explanation: .........N\).... \V\tli\J.4.t....... fUAd ...~......~ •~ ···· ......
·· ht. ~~ . ~ .f.tl. 00 .Wl--t lvtew..¥..l'.M!'1 Jlt,w.v.'.c
.............~~.....l>.4..Lr. . to.....ti..... l ~...~ .....~~ ..~ ... U)
·········· •........~ .u·. ~.~. .......... ..... ..........................................................................
Disadvantage: ·······~ ··IMl··./lf:U./r.,:..~ :c.i~ . ~ ··'·········· ··········

..................... ............ ~ •··········... ••········ ········ .................... .................... ...............

Explanation: - ..<A:t.... ~ .... j.Ji...~ ..~ •·-t#.u. .. ~ ···········

···~ ... ~w ~···~ ·;U>-··· ~··M f~,j......~....f~.l.~ ..~l~
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.........
.....................~.....J.P....... ~ ··: ~···WM....~ .(-..e....~ ...~ .......
· ···~ · ··· · &.Mk. . Uf.....~ .J..~ ···~ ··~Ce M.~. ............. [61

ution for a start-u p busine ss

(e) Do you think selling to a wholesaler is the best channel of distrib
to use? Justify your answer.

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ys. The method of production

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2 TBX manufactures high-quality steel which Is used to build railwa
ss holds a high level of inventory
used allows TBX to benefit from economies of scale. The busine
y could .have an impact on the
incl~ding iron ore_. The Managing Director knows business activit
to sustainable developmen t.
environment and 1s considering ways the business can contribute

(a) Identify two ways business activity could have an impac

t on the environment.

Way 1: ..... ? .~. . ... .·. . .. .. . . .. .... ..... . ..... .'. . . .. . . ..:. . . ... . ........ .. . . . . ...
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,
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·t.:'-~f.r.! .. ..Y..V.~ .. .. . .. . . . . . .. ...
• I

······························ ···· [2]

········· ················ ·········· ······························· ··· ·················· ········· ·········
: ''
development.
(b) Identify two ways a business could contribute to sustainable
. 0.. .i , • ,. ~ . -"' ,.. 1-0,, . . .................. ......... ........ ..
Way 1. ·······~ ~ - - - ·~ -~-~:-: .c✓.. . . ...• . . •.• . . . •. • . . . ..•• . . • •••.. . .• . . . •• . .

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Way 2: .......
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(c) Outline two possible economies of scale TBX might benef
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Economy of scale 1: .. .......~ . Af. .......... .............................. •.. •......... ...······· '
o , !
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(d) Explain two possible problems for TBX of holding a high level of inventory.

Problem 1: ... ~ .. ~........................................................................

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.. .. ..... . .. . .. .. . .. ... ✓.~~... wY.V.6"\l.. .. .. .. .. ....~... ~(✓. ..... ..

....................V.iMA.. .. ...~ ...: ~....~01:'t.~........ ............................... . ...... .

Problem 2: ······~ ·~ ~································ ·······························

.
·············································· ································· ····························································

(e) Do you think guality control is the best method for a manufacturing business to use to achieve
quality production? Justify your answer.

.*!if. ~, ~~ .Lo\AAf.et "' ~ ~ Mt ~ r t

······b>·~ ··~ ~··· · · · ~··•~ .. ~ .. ~..............

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3 Count.ry ~ has a. mixed economy with both private ~nd ~~bh~ the last 20 years the primary
organisations are r.nv..9J~ed in different sectors of econ_Q,mIc act1v1ty. n of the changes is shown in
sector has become less lmportanTiocountryX'seconomy..A s.um~~~mpanies to set up factories
!able 3.1 . The government is planning to encourage multinatrona
rn country X.

Table 3.1
ntage of GDP
Economic sectors In country X as a perce
Tertiary
Year Primary Secondary
'
25%
2000 15%
60% . 50%
2020 20% 30%

(a) Define 'public sector'.

.................................................:.............................:•1····-...............................:~ · 4

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+1 ~ ..~ A ~.. P.\.I .. .. ;.. • .. .. .. •
J........ • .... ......~.-tJ
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z;
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(b) Define 'gross domestic product' (GDP). . .. _ ~ '. 2
w -w
...
...::\kt.. .~ .va.w..t. .~···~ ····~!L.'iw..v.i" ... wA:-p.lM.• , .......... I -
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I

............................·... :.............. :............. ~-....... :..... ,:: ............ :................................................ . [2]

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(c) Identify four types of business organisation in the private sector.
, 'f) ( l J \ ~ . r I , • "'i...
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Type 2: .....~ ...~¾. .................................'.....................................:.................... .
.
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..............................·............................................., .............................................................. .

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Type 4: ...... r-.~:Y.1.' i.W ... :.. ··~ ··~ ... ~J,t ....~ .? - ~.........:............................. . ~
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(d) Using the data from Table 3.1, explain two possible reasons for the changing importance of
the primary sector in country X.
(j'•
.L!.:..·.....,..'....!....!. .. .'.. f._;.. :..:.:.......u.l.:~./,
_j I • ~• '

Reason 1: ............... ~ . f.e U~w.~

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··················· ························································ ························································· ·······

Js.l'l..t\AlAf.....~ r i·~···· ~ · · ~··· ~·M:',¥··
Explanation: ..
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......,ifA~ .it...~.l.~~/~. l ~·~&.( k ..~ .cJ . .

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Reason 2. .......... a:A)Jf.~J.!W
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lr-t)Wil'J4,/V fl rJ.b •

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I (e) Do you think the b.e~efits to a cduntry of having a multinational co~pany located there are
always greater tha~ ~ba_gs? Justify your. answer. ' .

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4 TFN, rs a travel business which sells holidays. It has 37 shops and 1000 employees. Last y~ar
TFN s profit inc~eased to $4 6 million. The Managing Director knows that ?ood customer serv1~e
has helped maintain customer loyalt He said: 'TFN's managers use rd~as from .H erz~r.g s
two-factor theory to help motivate emJ~yees. All ·employees are provided wrth off-the-Job trarnmg
and each manager has a wide span of control.'

.
(a) Identify two advantages to a business of maintaining customer 'loyalty.

Advantage 1: ........ ~ .S ~....................... i•··· ······· ······· ·····:···:················· ········

············:············ .. ·················································································································
Advantage 2: .........~~ .....~.~ ...................................................... .

,
······· ··········.. ·········..................................................... .........................................................
[2]

(b) Identify two hygiene factors from Herzberg's two-factor theory.

Hy~iene. factor 1: ..... $.~ ......................................,.............................. ................

. . .. . . .•. . . . . . .. . . . .. . . . . . . . .• . . . ., ....... ~ . .......•... ..... ..... ... ..... : . ..........•.. .... . . . .. -~ . ..•. . ·: . .•. . . .. j ' ... . ... ·: •. . . . ...... ..

Hygiene factor 2: ........ G.tQ«uf ...W ~•··£M.,N.i . ' t ~ ~..........................

[2]
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(c) Outline two reasons why profit might be important to TFN.

Reason 1 : .. fa . xe.in"v~ .~l.vib .~ ~TF.~., .....

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Reason 2: .. ~ ~
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of its managers having a wide span of
(d) Explain one advantage and one disadvantage to TFN
control.

Advantage: ......... ..... ~ .. ~ .V .t~ ............................................. ........ ..

········· ·················· ··········
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x
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......... ........................... ......... ... .................. .......................... .........
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training for a service sector business to
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(e) Do you think off-the-job training is the best method of
t- use? Justify your answer.
i
. . . . . Y~. . rM...~...s.r~:t.l$.....~..bt..~..~ .~ .'...~

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