NOVEMBER 2012 EXAMINATION DATE: 15 NOVEMBER 2012 DURATION: 3 HOURS PASS MARK: 40% (JD-43)

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1 ENTBUS NOVEMBER 2012 EXAMINATION DATE: 15 NOVEMBER 2012 TIME: 09H00 12H00 TOTAL: 100 MARKS DURATION: 3 HOURS PASS MARK: 40% (JD-43) ENTREPRENEURSHIP THIS EXAMINATION PAPER CONSISTS OF 4 SECTIONS: SECTION A: CONSISTS OF: (i) 10 MULTIPLE-CHOICE QUESTIONS (10 MARKS) (ii) 5 TRUE OR FALSE QUESTIONS (10 MARKS) (iii) 10 MATCHING-STATEMENT QUESTIONS (10 MARKS) SECTION B: SECTION C: SECTION D: INSTRUCTIONS: CONSISTS OF 3 SHORT QUESTIONS CONSISTS OF 3 LONG ANSWER QUESTIONS CONSISTS OF 3 INTERPRETATIVE QUESTIONS ANSWER ANY ONE OF THE QUESTIONS (10 MARKS) (40 MARKS) (20 MARKS) 1. Read the following instructions carefully before answering the paper, as failure to act upon them will result in a loss of marks. 2. Write your answers in your answer book, which is provided in the exam. 3. Ensure that your name and student number are clearly indicated on your answer book. 4. Write your answers in either blue or black ink in your answer book. 5. Read each question very carefully before you answer it and number your answers exactly as the questions are numbered. 6. Begin with the question for which you think you will get the best marks. 7. Note the mark allocations for each question give enough facts to earn the marks allocated. Don't waste time by giving more information than required. 8. You are welcome to use diagrams to illustrate your answers. 9. Please write neatly we cannot mark illegible handwriting. 10. Any student caught cheating will have his or her examination paper and notes confiscated. The College will take disciplinary measures to protect the integrity of these examinations. 11. If there is something wrong with or missing from your exam paper or your answer book, please inform your invigilator immediately. If you do not inform your invigilator about a problem, the College will not be able to rectify it afterwards, and your marks cannot be adjusted to allow for the problem. 12. This paper may be removed from the examination hall after the examination has taken place. SPECIAL REQUIREMENTS: NON-PROGRAMMABLE CALCULATOR, PENCIL AND RULER Examiner: A Guilfayle DAMELIN CORRESPONDENCE COLLEGE NOVEMBER 2012 PAGE 1 OF 8

2 SECTION A (30 MARKS) (i) MULTIPLE-CHOICE QUESTIONS Choose the correct option for each of the following. Write only the question number and your chosen answer. For instance, if you think that the correct answer for number 1 is, then write it as An intrapreneur can be defined as: someone who starts his or her own business. a person who is responsible for managing an existing business. someone who sets up a business enterprise with a partner. a financier who enters into an arrangement with a business owner to finance the venture. 2. A patent is described as: a document signed by someone before you tell him or her about your business idea. information on a document that includes the name of an author or artist as well as the date of publication. a symbol displayed on a product to identify its producer. a licence that gives only you the right to produce and market a product for a set time span. 3. Psychographic segmentation refers to: market possibilities, including the number of sales you expect. decisions on why customers will buy your product. occupation, gender, education and age of potential customers. the lifestyle and status of potential customers within their community. 4. Contribution percentage is a term NOT used to describe: profit mark-up percentage. gross profit percentage. break-even point. All the above. 5. The induction process refers to the: initial selection process the candidate undergoes. period in which the new employee is familiarised with the environment in which he or she will work. process of evaluating an employee's work performance. motivation process that the entrepreneur follows with his or her employees. DAMELIN CORRESPONDENCE COLLEGE NOVEMBER 2012 PAGE 2 OF 8

3 6. Which of the following is NOT a type of packaging used in the marketing of products? exclusive multiple individual kaleidoscope 7. As part of the selling technique, the term interview refers to: developing a friendly approach to the customer. identifying the customer's needs. providing the customer with other customers' details. describing the benefits of the product to the potential customer. 8. The term dividend can be defined as: the payment that shareholders receive once a company has announced annual profits. the report submitted once an audit has been completed. the regional taxes that a company is obliged to pay. the registration of a business in terms of the legislation. 9. When buying an existing business, the residual value method refers to: calculating additional income that may be generated based on goodwill. evaluating a business with a high growth rate. comparing the future income potential of the target business with similar businessses in the same industry. using the price / earnings ratio of similar businesses to determine the value of one's own business. 10. The phytosanitary certificate is a document required by some countries for the importing of: medicines. fruit, vegetables and canned fruit juices. packing materials and second-hand clothing. plants and plant products. [10] (ii) TRUE OR FALSE QUESTIONS Choose whether the following are True or False. Motivate all your answers. 1. A survey is a method of collecting secondary data. 2. A fixed position layout is applicable where the product or project is too large to be moved. 3. Fundamental risks refer to risks caused by the mistakes and misdeeds of human beings. 4. Price lining refers to the pricing of items or services that are similar in appearance, quality and performance. 5. In equity financing, a second mortgage on one's house could be included into the category of personal finance. [5 2 = 10] DAMELIN CORRESPONDENCE COLLEGE NOVEMBER 2012 PAGE 3 OF 8

4 (iii) MATCHING-STATEMENT QUESTIONS Match the statements in Column B to the terms in Column A. Write down the answers only, for example 1.. Column A Column B 1. opportunities only available at exclusive outlets 2. total costs lists objectives for your business 3. market segmentation suppliers, customers, staff and friends 4. market environment cc registration documents 5. specialty merchandise (e) positional 6. networking (f) variable and fixed costs added together 7. projected cash flow statement (g) positive possibilities in the external environment 8. CK1 and CK7 (h) competitors, consumers and suppliers 9. business plan (i) identification and division of the market into groups with similar needs, preferences and demands 10. negotiation approach (j) helps avoid cash shortage [10] [30] DAMELIN CORRESPONDENCE COLLEGE NOVEMBER 2012 PAGE 4 OF 8

5 SECTION B: SHORT QUESTIONS (10 MARKS) QUESTION 1 The success of an entrepreneur depends on his or her entrepreneurial skills and knowledge. Identify two possible ways in which an entrepreneur can avoid business failure. [2] QUESTION 2 The manufacturing layout is determined by the nature of the product being produced. Give two types of commonly used layout. [2] QUESTION 3 i. State the aspect of a business that the pricing policy impacts. (1) ii. List two possible pricing strategies that can be used when a new product is introduced to the market. (2) List three marketing techniques that the entrepreneur could use to increase the sales of slow-moving stock in the business. (3) [6] [10] DAMELIN CORRESPONDENCE COLLEGE NOVEMBER 2012 PAGE 5 OF 8

6 SECTION C: LONG ANSWER QUESTIONS (40 MARKS) QUESTION 1 You are considering purchasing an existing business in your community. You have conducted research on the positive and negative factors of purchasing an existing business. Identify and elaborate on five of the advantages of purchasing an existing business. [5 2 = 10] QUESTION 2 You are an entrepreneur and have recently opened an internet café named Coffee dot com. You need to design a flyer or advertisement to advertise your business. Discuss the requirements of the flyer / advertisement according to the AIDA formula (Attention, Interest, Desire, Action) so as to attract your specific target market. [10] QUESTION 3 The demands placed by the patrons of the internet café, Coffee dot com, have increased. You realise that you need to employ additional staff members to meet the customer needs. i. Identify the steps that you will follow in acquiring additional staff members. (5) ii. Provide a brief explanation for each of the steps you identified in the question i. above. (5) Name and provide a brief explanation of the factors that should receive consideration by the entrepreneur when deciding on the type of ownership of a business. (10) [20] [40] DAMELIN CORRESPONDENCE COLLEGE NOVEMBER 2012 PAGE 6 OF 8

7 SECTION D: INTERPRETATIVE QUESTIONS (20 MARKS) ANSWER ONE OF THE QUESTIONS QUESTION 1 Ntombi was unemployed for 12 months. She started a hairdressing salon in the township where she lives. She attended training courses in hairdressing as well as business training workshops. Ntombi is the only hairdresser in the area and specialises in braiding and perming hair. She named her business Curl up and Dye Hairdressing Salon. The business is thriving and she has employed two additional assistants. Ntombi has provided the assistants with on-the-job-training. These assistants help with the shampooing, conditioning and braiding, and the selling of hair products. They have a thorough knowledge of the products that they market and sell. Owing to the speed with which her business has grown, she has not had the time to enlarge her salon to accommodate extra patrons. The salon's space is limited. Furthermore, her cash flow has been used to purchase stock. After trading for 24 months, Ntombi finds advertisements in the local newspaper announcing plans to build a new shopping mall in the township. Ntombi is concerned about the new shops. You are required to refer to the information in the case study above. Complete a SWOT analysis. Identify the headings and provide suitable explanations and examples under each heading. [4 5 = 20] OR QUESTION 2 Mary has great plans to open up a pizza parlour that sells pizzas, pastas and wraps. She has done a feasibility study and given that there are colleges, a gym and a university within a one to three kilometre radius, there will be many possible customers. In addition, her prices are reasonable and the menu offers a varied selection of items. Her problems though are twofold. She does not have a lot of capital and she is not sure which form of ownership would be best suited to her business. On the positive side, her culinary skills are excellent; she has both a Diploma in Business Management and experience in running a small home-based business. Provide Mary with three different options for a form of ownership, explain the characteristics of these forms of ownership, and include one advantage and one disadvantage for each option. Finally, select one you feel is best suited and motivate your choice. [20] OR DAMELIN CORRESPONDENCE COLLEGE NOVEMBER 2012 PAGE 7 OF 8

8 QUESTION 3 Nosicelo manufactures and sells leather bags. The material she requires costs R1 900, labour costs are R950 and other indirect costs amount to R850. With this amount of raw material and related costs, she is able to manufacture 20 bags. Applying the formulae, calculate the following costs. Ensure that all calculations are included: i. the total cost incurred by Nosicelo (3) ii. the cost of manufacturing one handbag (3) iii. the selling price needed to make 35% profit (4) i. Define the term break-even. (3) ii. Simone makes assorted sandwiches that she sells to employees of businesses in a nearby centre. The fixed costs incurred amount to R275, variable costs to R6 a sandwich. The selling price of the sandwiches is R15 per sandwich. Calculate the break-even in units. Show your workings. (5) iii. Explain the meaning of the value in (ii). (2) [20] [20] Section A: 30 marks Section B: 10 marks Section C: 40 marks Section D: 20 marks TOTAL: 100 MARKS DAMELIN CORRESPONDENCE COLLEGE NOVEMBER 2012 PAGE 8 OF 8