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UNIVERSITY OF CAMBRIDGE INTERNATIONAL EXAMINATIONS

General Certificate of Education Ordinary Level

*4718586464*

7115/22

BUSINESS STUDIES
Paper 2

May/June 2010
1 hour 45 minutes

Candidates answer on the Question Paper.
Additional Materials:

Insert

READ THESE INSTRUCTIONS FIRST
Write your Centre number, candidate number and name on all the work you hand in.
Write in dark blue or black pen.
Do not use staples, paper clips, highlighters, glue or correction fluid.
DO NOT WRITE IN ANY BARCODES.
Answer all questions.
The Insert contains the case study.
The business described in this question paper is entirely fictitious.
At the end of the examination, fasten all your work securely together.
The number of marks is given in brackets [ ] at the end of each question or part question.

For Examiner’s Use
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This document consists of 11 printed pages, 1 blank page and 1 Insert.
DC (SLM) 28424
© UCLES 2010

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......................... ........................................................ ................................................................................................................................................................................................................ Explanation: ................... .......... .......................... ........................................................................................................................................... [8] © UCLES 2010 7115/22/M/J/10 For Examiner’s Use ................................................................................................................................................................................. Aim 2: ................................ .................... ......... Explanation: .................................................................. .............................................................................................................................................................................................................................................................................2 1 (a) Bashir wants to continue to expand the business.................................................................................................................................................................................................. Aim 1: ............................... ................................................................................................... Identify and explain two other aims Bashir might have for the business..................................................................................................................................................................................................................................................................... ............................................................................................................................................ ......................................................................... .................................................................................................................................................................................................................................................................................................

........... .................................................. ............................................................................................................................................................................................................... .............................................................................. .. .................................... Consider these three options for raising finance and recommend which one he should choose........................................................................................................................................................................................................................................................................ Take on a partner: ........ ..... [12] © UCLES 2010 7115/22/M/J/10 [Turn over .............................................................................................................................................................. ............................................................................................................................................ ...................................................................................................................................................................................................... .........................3 (b) To expand the business Bashir will need to raise finance...................................................................... ..................................................................................................................... ............. ........................................................................................................................ ..... ............................................................................................................................................................................................... ......................................................................................................................................................................................................... ................................................................................... ..................................................................................... .............. Sell shares: .............................. .......................................................................................................................................................................................................................................................................................................................................................................................................................................................................................... .................................................................................. For Examiner’s Use Selling assets: ............................ Recommendation: .................................. Justify your choice................................................................................................................................................................................................................................................................................................................................ He is considering either selling assets owned by the business............................................................. taking on a business partner or selling shares by forming a private limited company..................................................................................................

.............. ..................................................................................................................................................................................................................................................................................................................... Reason 2: .............. [8] © UCLES 2010 7115/22/M/J/10 For Examiner’s Use .............................................................................................................................................................................................................................................. Reason 3: ....................................................................... ................................................................................................... .......................................................................................................................... .............................. ....................................................................... Reason 1: ........................4 2 (a) Explain four reasons why employees at Bashir Baskets might want to be members of a trade union.................................................................................................................................................................... ............................................................................................................ ............................................. Reason 4: ...................................................... ........................................................................ .......................................................................................................................................................................................................... ......................................................................................................................................................................................................................................................... ............................................................................................. ...........................................................................................................................................................

............................................................................................................................................................. ........... ................................................................................................................................................ .................................................................... .............................................................. .............................................................................. ........................................................................... ....................................................................... Advertisement: ......................................................................................................................................................................................................................................................................................................................................... ................................... [12] © UCLES 2010 7115/22/M/J/10 [Turn over .................... ...................................................................................................................................................................................................... ...... For Examiner’s Use Job description: ..............................5 (b) Job description job specification advertisement interviews Why are each of these stages of the recruitment and selection process important to Bashir when choosing suitable employees? Justify your answer for each stage................................................................................ ............... ... ........................................................................................................................................................................................ Job specification: ................................................. ......................................................................................... ........................................................ ................................................................................................................................................................................................................................................................................................................................................................................... ........................................ Interviews: ....... ........................................................................................................................................................................................... .................................................................................................................................................................................................................................................................................................................................. ...........................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................

............................................................................. ......................... ........................................ ................................................6 3 (a) Bashir could expand into the market for baskets of flowers for the home............................................................................................................................................. [8] © UCLES 2010 7115/22/M/J/10 For Examiner’s Use ....................... Explain how he should carry out this research......................................................................................................................................................................... ................................................................................. .......................................................................................................................................................................................................................................................................................................................................................................... ...................................................................................................... .................. ...................................................................... .................................................................................................................................................................................................... ................................................................................................................................................. He wants to carry out primary market research using questionnaires.......................................................................................... ............... .... ............................................................................................................................. ................................................................................................................................................................................................................................................................................................... ................................................................................................. .........................................................................................

........................................ ................................................................................................................................................................................................................................................................................................................. ................................................................................................................................................... ........................................................................................................................................................... ........................... Justify your choice using appropriate calculations........ Recommend which one of the two options he should choose............................................................................................................................................................................................................................................................................................................................................................................ ........................................................................................................................................ ............................................................................................................................................................................. ................................................................................................. ................................................................................................................................................................................. .....................................................................................7 (b) Consider the two options for expanding Bashir’s business outlined in the case................................................................. ................................................................. .................................................................................................................................................................................................................................................... ........................................... ........................................................................... Option 2 (Baskets for restaurants): ..................................................................................................................... Recommendation: ................................................................................................................................................................................................... ................... ...................................................................................... ................................................................................................ .............................................. ................................................... ...... ................................ ................ For Examiner’s Use Option 1 (Baskets for the home): ......... [12] © UCLES 2010 7115/22/M/J/10 [Turn over ....................................................................................................................................................................................................................................................................................................

............................................................................................................................................................................................................... ...................... Explanation: ................................................................................... Explanation: .......................... Explanation: ........................................................................................................................................................................................................................................................................................................................ Example 2: ................. Example 1: ................................ ........................................................................... Example 3: ................................................................................................... ...................................................................................... ........................................................................................................................................................ ...................................................................................................... ......................................................8 4 (a) Bashir Baskets is in the secondary sector but Bashir also uses many services from businesses in the tertiary sector........................................................................................................................... .............................................................................................................................................................. Explanation: ........................................................................................................................................ such as insurance. [8] © UCLES 2010 7115/22/M/J/10 For Examiner’s Use ........................................................................................... .................................................................................................................................................................................................................................................. Identify four other examples of tertiary sector businesses that Bashir might use and explain how each will help his business........................ Example 4: ......

........................................................................................................................................................................................................................................................... [12] © UCLES 2010 7115/22/M/J/10 [Turn over .................................................................................................................................................................................................................................................. Justify your choice............................................................................................. .............................................................. ......................... Explain three methods of promotion that Bashir could use................................................................................................................................. ....................................................................................................................................... ............................................................................................................................. Method 3: ................................................................................................................................................................................... ...................................................................................................................................................................................................... ......... ................................................................................... .............................................. ... ........ .......................................................................................................................................................... ............................................................. ................................................................................................................................................................ Recommend which one you think would be the best method to use..................................................................................................................................... ..................................................................... For Examiner’s Use Method 1: .......................................................................9 (b) Suppose Bashir decided to start making flower baskets for the home..................................................................................................................................................................... ....................................................................................... ............................................................... Recommendation: ................................ ......................................................................... Method 2: .............................................................................................................................................................................................................................................................................. .................................................................................................................................................................. ................................ ..............................................................................................................

........................................................................................................................................................................................................................................................................................................................................................................ ................................................... ........10 5 (a) Bashir buys flowers from other countries.................................. .... Appreciation in the exchange rate: .... ........................................................................................................................................................................................ ................................................................................................................................................ ........................................................................................... ..................................................................................................................................................................................... ................................................................................................................................................................................................................................................... ...................................................................................................................................................................................................................................................... ................. Introduction of a tariff: ................................................................................................................................................. Explain how an appreciation in the exchange rate and the introduction of a tariff on imported flowers might affect his business.................... [8] © UCLES 2010 7115/22/M/J/10 For Examiner’s Use ......................................................... .............................. ............................................................................................ ........................................................................................................................................................................................... .................

.................... .................................................................................................................................................................................................................................................................................................................... Profit and loss account: .............................................. . .............. [12] © UCLES 2010 7115/22/M/J/10 For Examiner’s Use ................................................................... a profit and loss account and a break even chart important to the successful financial management of Bashir Baskets? Justify your answers.......... . .............................................................................................................. ......................................................................................................................... .................. ........................................................................................................... ............................................................................................................................................ .................................................................... ......... Why are producing a cash flow forecast.................................................................................. ................................................................................................................................................................................................................................................................... Break even chart: ...................................................................................................................................................................................................................................................... ............................... .......................... ...................................................... ........................................................................................................................................................................................................................................................................................................................................................................ .................................................................................................................................................... Cash flow forecast: ........................................................... ........................................................................................................................................................................................ .......................................................................................................................................................................................................................................... ................11 (b) Financial accounts are important to all businesses................................................................................................................................................................................................................................................................................................................................................................................................................................................ .......................................

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