Cambridge International Examinations Cambridge International General Certificate of Secondary Education

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1 Cambridge International Examinations Cambridge International General Certificate of Secondary Education * * BUSINESS STUDIES 0450/11 Paper 1 May/June hour 30 minutes Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your Centre number, candidate number and name in the spaces at the top of this page. Write in dark blue or black pen. You may use an HB pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, glue or correction fluid. DO NOT WRITE IN ANY BARCODES. Answer all questions. The businesses described in this question paper are 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. The total number of marks for this paper is 80. The syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate. This document consists of 9 printed pages and 3 blank pages. DC (NF/AR) 97916/2 [Turn over

2 2 1 Gomez is the manager of a small computer repair business. Table 1 shows some costs and prices for his business. As it is a competitive market, Gomez knows it is important to maintain customer loyalty and revenue. Gomez knows that a lower break-even point would help improve profits. He thinks the best way to lower the break-even point is to raise prices. Table 1: Cost and price information Price per customer $30 Variable cost per customer $20 Average number of customers per month 140 Monthly fixed costs $1000 (a) What is meant by revenue?... [2] (b) What is meant by variable cost?... [2] (c) Using the information in Table 1, draw a break-even chart for Gomez s business. [4] costs and revenue ($ per month) number of customers per month /11/M/J/15

3 (d) Identify and explain two methods that Gomez could use to maintain customer loyalty. 3 Method 1:... Method 2: [6] (e) Gomez thinks the best way to lower the break-even point is to raise prices. Do you agree? Justify your answer.... [6] 0450/11/M/J/15 [Turn over

4 4 2 Country S is enjoying an economic boom. During this time, businesses have increased their profits and unemployment has fallen. The only problem is inflation. All Active is a private limited company. It owns 20 sport and fitness clubs in country S. The Managing Director said: This is a good time to expand by opening 5 more clubs. Finding the right locations is important. We will need to recruit more employees. He cannot decide whether it would be an advantage for All Active to become a public limited company. (a) Identify two stages of the recruitment process. Stage 1:... Stage 2:... [2] (b) What is meant by an economic boom?... [2] (c) Explain how falling unemployment might affect All Active.... [4] 0450/11/M/J/15

5 5 (d) Identify and explain two factors that All Active should consider when deciding on the location of the new clubs. Factor 1:... Factor 2: [6] (e) Consider the advantages and disadvantages for All Active of being converted to a public limited company. Do you think All Active should become a public limited company? Justify your answer.... [6] 0450/11/M/J/15 [Turn over

6 6 3 Si and Ramon are friends. They want to set up a photography business. They would take pictures at weddings, birthdays and other special events. The business will be a partnership. Based on their primary market research, Si believes there is enough demand. Ramon has produced a business plan which shows they need $8000 for a shop and $4000 for equipment. They plan to spend $500 on promotion, but cannot agree on the best method to use. (a) What is meant by a partnership?... [2] (b) Identify two methods of primary market research that Si and Ramon might have used. Method 1:... Method 2:... [2] (c) Identify and explain two possible sources of finance that they could use to obtain the equipment. Source 1:... Source 2: [4] 0450/11/M/J/15

7 (d) Identify and explain two advantages to Si and Ramon of having a business plan. 7 Advantage 1:... Advantage 2: [6] (e) Consider two methods of promotion that would be suitable for Si and Ramon to use. Which of these two methods would be the most appropriate? Justify your answer.... [6] 0450/11/M/J/15 [Turn over

8 8 4 Javid is a company that manufactures a range of luxury chocolates using batch production. Over the past year, profit has fallen due to increased competition. In order to cut costs, the Finance Director has suggested the company introduces new technology into the production process. The Human Resources Director is not sure that workers would benefit from the introduction of new technology. (a) What is meant by batch production?... [2] (b) Identify two advantages (other than cutting costs) to the company of using new technology. Advantage 1:... Advantage 2: [2] (c) Identify and explain two reasons why the quality of chocolates might be important to this company. Reason 1:... Reason 2: [4] 0450/11/M/J/15

9 (d) Identify and explain two problems that a fall in profit might cause for the company. 9 Problem 1:... Problem 2: [6] (e) Do you think that the introduction of new technology would benefit Javid s workers? Justify your answer.... [6] 0450/11/M/J/15

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12 12 BLANK PAGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at after the live examination series. Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. 0450/11/M/J/15

13 Cambridge International Examinations Cambridge International General Certificate of Secondary Education * * BUSINESS STUDIES 0450/12 Paper 1 May/June hour 30 minutes Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your Centre number, candidate number and name in the spaces at the top of this page. Write in dark blue or black pen. You may use an HB pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, glue or correction fluid. DO NOT WRITE IN ANY BARCODES. Answer all questions. The businesses described in this question paper are 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. The total number of marks for this paper is 80. The syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate. This document consists of 10 printed pages and 2 blank pages. DC (NF/AR) 97917/2 [Turn over

14 2 1 PJK makes a range of luxury sports watches. Each watch is handmade by skilled workers. Quality assurance is important. The Operations Director has been looking at costs and prices as he wants to do a break-even analysis. This data is shown in Table 1. He is planning to invest in new technology to automate parts of the production process. The Operations Director thinks this is the best way to improve profitability. Table 1: Costs and revenue ($) Price per watch $100 Variable cost per watch $50 Annual sales 6000 Annual fixed costs $ (a) What is meant by quality assurance?... [2] (b) Identify two ways in which break-even analysis might be helpful to PJK. Way 1:... Way 2: [2] 0450/12/M/J/15

15 3 (c) Using the information in Table 1, draw a break-even chart for PJK on Figure 1. [4] Figure costs and revenue ($ per year) output (units) 0450/12/M/J/15 [Turn over

16 (d) Identify and explain two advantages to PJK of having skilled workers. 4 Advantage 1:... Advantage 2: [6] (e) Do you think that investing in new technology is the best way to improve profitability at PJK? Justify your answer.... [6] 0450/12/M/J/15

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18 6 2 Alkin is a multinational company. It manufactures breakfast food products including many leading brands of cereal. Alkin plans to start selling in country Z, which is a fast-growing market. Alkin plans to form a joint venture with a local business, based in country Z. Effective communication will be important to our success but I think there are many advantages in expanding this way said Alkin s Managing Director. The Government of country Z is worried about the effect of multinational companies like Alkin on consumers. (a) What is meant by a multinational company?... [2] (b) What is meant by a brand?... [2] (c) Identify and explain two reasons why effective communication might be important for Alkin. Reason 1:... Reason 2: [4] 0450/12/M/J/15

19 7 (d) Identify and explain two advantages to Alkin of using a joint venture to expand into country Z. Advantage 1:... Advantage [6] (e) Do you think that the Government in country Z is right to be worried about the effect of multinational companies such as Alkin on consumers? Justify your answer.... [6] 0450/12/M/J/15 [Turn over

20 8 3 Mabel wants to set up her own hairdressing business. She will need to build good customer relationships. She has done some secondary market research to find out possible demand and what methods of promotion to use. She has decided to buy her inventory (stock) from a wholesaler. Mabel is now looking for the right location for her business. She thinks that location will be more important than price charged to the success of her business. (a) Identify two ways that a business could build good customer relationships. Way 1:... Way 2: [2] (b) What is meant by secondary market research?... [2] (c) Identify and explain two methods of promotion (other than promotional pricing) that Mabel might use. Method 1:... Method 2: [4] 0450/12/M/J/15

21 9 (d) Identify and explain two possible disadvantages to Mabel of buying her inventory from a wholesaler. Disadvantage 1:... Disadvantage 2: [6] (e) Do you think that the right location is more important than the prices she charges to the success of Mabel s business? Justify your answer.... [6] 0450/12/M/J/15 [Turn over

22 10 4 A2Z is a small but successful airline company in country B, providing flights for business people. The management of A2Z wants the business to expand. It will have to buy more aeroplanes and recruit more airline pilots. The Human Resources manager has produced a job description for the pilots. She is now ready to advertise for the new pilots. She believes the best way for A2Z to motivate its pilots is to use financial rewards. (a) Identify two possible reasons why A2Z might want to expand. Reason 1:... Reason 2: [2] (b) Identify two factors that A2Z should consider when choosing a source of finance to buy more aeroplanes. Factor 1:... Factor 2: [2] (c) Identify and explain two advantages to A2Z of producing a job description. Advantage 1:... Advantage 2: [4] 0450/12/M/J/15

23 (d) Identify and explain two suitable ways A2Z could use to advertise the new jobs. 11 Way 1:... Way 2: [6] (e) Do you think that using financial rewards is the best way for A2Z to motivate its pilots? Justify your answer.... [6] 0450/12/M/J/15

24 12 BLANK PAGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at after the live examination series. Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. 0450/12/M/J/15

25 Cambridge International Examinations Cambridge International General Certificate of Secondary Education * * BUSINESS STUDIES 0450/13 Paper 1 May/June hour 30 minutes Candidates answer on the Question Paper. No Additional Materials are required. READ THESE INSTRUCTIONS FIRST Write your Centre number, candidate number and name in the spaces at the top of this page. Write in dark blue or black pen. You may use an HB pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, glue or correction fluid. DO NOT WRITE IN ANY BARCODES. Answer all questions. The businesses described in this question paper are 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. The total number of marks for this paper is 80. The syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate. This document consists of 10 printed pages and 2 blank pages. DC (NH/SG) 97918/3 [Turn over

26 2 1 GK Hotel is a small hotel in the city centre. It has 15 rooms. Most of its customers are tourists. Last year the number of customers fell due to changes in consumer spending patterns and increased competition. The Marketing manager believes GK must attract customers from different market segments if the hotel is to increase its profits. His plan is to improve the GK website. He is not sure whether he should change the cost plus pricing method he uses. Table 1: Cost and price data for GK Hotel Average price per room $40 Variable cost per room $20 Total fixed costs per month $4000 Average number of rooms booked and paid for per month 250 (a) What is meant by market segment?...[2] (b) Identify two reasons why consumer spending patterns might change. Reason 1:... Reason 2:......[2] 0450/13/M/J/15

27 3 (c) Using the information in Table 1, draw a break-even chart for GK Hotel on Figure 1. [4] Figure costs and revenue ($ per month) number of rooms booked per month 0450/13/M/J/15 [Turn over

28 (d) Identify and explain two benefits to GK Hotel of having a website. 4 Benefit 1:... Benefit 2:......[6] (e) Do you think that cost plus pricing is the best pricing method for GK Hotel to use? Justify your answer....[6] 0450/13/M/J/15

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30 6 2 Camille is an entrepreneur. She owns a popular and successful hairdressing business. Camille wants to expand her small business. Camille currently employs 5 part-time workers, but she will have to recruit 3 more workers who will need on-the-job training. She thinks that her laissez-faire leadership style will have to change as her business grows. (a) Identify two ways to measure the size of a business (other than number of employees). Way 1:... Way 2:......[2] (b) Identify two characteristics of a successful entrepreneur. Characteristic 1:... Characteristic 2:......[2] (c) Identify and explain two advantages to Camille of employing part-time workers. Advantage 1:... Advantage 2:......[4] 0450/13/M/J/15

31 (d) Identify and explain two problems for Camille of using on-the-job training. 7 Problem 1:... Problem 2:......[6] (e) Camille thinks that her laissez-faire leadership style will have to change as her business grows. Do you agree? Justify your answer....[6] 0450/13/M/J/15 [Turn over

32 8 3 Bowland manufactures bicycles from components purchased from suppliers. The production method makes use of specialisation. The Finance manager said: It has been a successful year because profit is up. However cash flow is still negative. Trade receivables (debtors) have increased and we have purchased a lot of new equipment. Bowland s management believes that improving quality has been the most important reason why bicycle sales have increased. (a) What is meant by specialisation?...[2] (b) Identify two ways (other than profit) that Bowland could use to measure its success. Way 1:... Way 2:......[2] (c) Identify and explain two reasons why cash flow is important to Bowland. Reason 1:... Reason 2: [4] 0450/13/M/J/15

33 (d) Identify and explain two ways in which Bowland could improve its cash flow. 9 Way 1:... Way 2:......[6] (e) Bowland s management believes that improving quality has been the most important reason why sales have increased. Do you agree? Justify your answer....[6] 0450/13/M/J/15 [Turn over

34 10 4 BRZ sells outdoor clothing, such as waterproof trousers and coats, in country X. It imports most of its inventory (stock) from low wage countries. Globalisation has changed how we do business. It offers many opportunities but I have to consider import quotas and exchange rates said the Operations Director. BRZ tries to act in an ethical way with all its stakeholders. The Operations Director is not sure if it is possible for BRZ to be both ethical and profitable. (a) What is meant by an import quota?...[2] (b) What is meant by inventory (stock)?...[2] (c) Explain how a depreciation in the value of country X s currency might affect the profits of BRZ....[4] 0450/13/M/J/15

35 (d) Identify and explain two opportunities that globalisation might offer BRZ. 11 Opportunity 1:... Opportunity 2:......[6] (e) Do you think it is possible for companies such as BRZ to be both ethical and profitable? Justify your answer....[6] 0450/13/M/J/15

36 12 BLANK PAGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at after the live examination series. Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. 0450/13/M/J/15

37 Cambridge International Examinations Cambridge International General Certificate of Secondary Education * * BUSINESS STUDIES 0450/21 Paper 2 May/June hour 30 minutes Candidates answer on the Question Paper. Additional Materials: Insert. READ THESE INSTRUCTIONS FIRST Write your Centre number, candidate number and name in the spaces at the top of this page. Write in dark blue or black pen. You may use an HB pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, 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. The total number of marks for this paper is 80. The syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate. This document consists of 9 printed pages, 3 blank pages and 1 Insert. DC (ST) 97967/1 [Turn over

38 2 1 (a) Identify and explain two characteristics David needs to be a successful entrepreneur. Characteristic 1:... Characteristic 2:......[8] 0450/21/M/J/15

39 3 (b) David has appointed a manager to control each department as shown in Appendix 1. Identify and explain three management functions of the Operations manager. Which do you think is the most important management function? Justify your answer. Function 1:... Function 2:... Function 3:... Most important function for Operations manager:......[12] 0450/21/M/J/15 [Turn over

40 4 2 (a) Identify and explain two ways in which marketing is important for DD. Way 1:... Way 2:......[8] 0450/21/M/J/15

41 5 (b) Consider the advantages of using e-commerce and the advantages of selling to supermarkets in other countries. Recommend which way DD should use to increase sales. Justify your answer. E-commerce:... Selling to supermarkets in other countries:... Recommendation:......[12] 0450/21/M/J/15 [Turn over

42 6 3 (a) The company Balance Sheet helps David assess the performance of the business. (i) Calculate the current ratio and acid test ratio for [4] (ii) Compare your two ratio results with those of 2013 (see Appendix 2) [4] 0450/21/M/J/15

43 7 (b) David wants to increase efficiency in his factory. Consider Option A and Option B and then recommend which one he should choose. Justify your answer. Option A:... Option B:... Recommendation:......[12] 0450/21/M/J/15 [Turn over

44 8 4 (a) Identify and explain four factors DD should consider when packaging cakes if they are exported. Factor 1:... Factor 2:... Factor 3:... Factor 4:......[8] 0450/21/M/J/15

45 9 (b) External factors can affect the profitability of a company. For each of the following changes consider how it might affect DD s profit. Which change is likely to have the greatest effect on DD s profit? Justify your answer. Increasing GDP in country X:... Reduced supply of the raw materials used to make cakes:... Television programme highlighting the effects on health of eating too many cakes:... Conclusion:......[12] 0450/21/M/J/15

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48 12 BLANK PAGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at after the live examination series. Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. 0450/21/M/J/15

49 Cambridge International Examinations Cambridge International General Certificate of Secondary Education * * BUSINESS STUDIES 0450/22 Paper 2 May/June hour 30 minutes Candidates answer on the Question Paper. Additional Materials: Insert. READ THESE INSTRUCTIONS FIRST Write your Centre number, candidate number and name in the spaces at the top of this page. Write in dark blue or black pen. You may use an HB pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, 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. The total number of marks for this paper is 80. The syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate. This document consists of 9 printed pages, 3 blank pages and 1 Insert. DC (LK) 97971/1 [Turn over

50 2 1 (a) Samah and Selina wrote a business plan before FF started trading 5 years ago. Identify and explain two ways their business plan might have helped to make the business successful. Way 1:... Way 2:......[8] 0450/22/M/J/15

51 3 (b) Consider the advantages to FF of employing full-time workers and the advantages to FF of employing part-time workers. Do you think a combination of these two types of workers would be best? Justify your answer. Advantages of full-time workers:... Advantages of part-time workers:... Conclusion:......[12] 0450/22/M/J/15 [Turn over

52 4 2 (a) Identify and explain two benefits to FF of targeting a specific market segment for its products. Benefit 1:... Benefit 2:......[8] 0450/22/M/J/15

53 5 (b) Samah and Selina will want to promote the new flavour of ice-cream. Consider the advantages and disadvantages of the following three methods of promotion. Recommend which is the best method for Samah and Selina to use. Justify your answer. Advertising on social networks:... Handing out leaflets with a discount offer on them:... Giving out free samples in shopping malls:... Recommendation:......[12] 0450/22/M/J/15 [Turn over

54 6 3 (a) Samah and Selina are considering buying ingredients from another supplier called ABC (see Appendix 2). Identify and explain one advantage and one disadvantage to FF of changing to ABC. Advantage:... Disadvantage:......[8] 0450/22/M/J/15

55 7 (b) Samah and Selina want to start selling a new flavour of ice-cream. Consider the two options outlined in Appendix 3. Recommend which one they should choose. Justify your answer. Option A:... Option B:... Recommendation:......[12] 0450/22/M/J/15 [Turn over

56 8 4 (a) The Government of country X has recently increased interest rates. Identify and explain two ways an increase in interest rates might affect FF. Way 1:... Way 2:......[8] 0450/22/M/J/15

57 9 (b) A multinational food company is producing and selling its products in country X (see Appendix 1). Consider the advantages and disadvantages to FF of this multinational operating in country X. Do you think it is beneficial to FF? Justify your answer. Advantages to FF:... Disadvantages to FF:... Conclusion:......[12] 0450/22/M/J/15

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60 12 BLANK PAGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at after the live examination series. Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. 0450/22/M/J/15

61 Cambridge International Examinations Cambridge International General Certificate of Secondary Education * * BUSINESS STUDIES 0450/23 Paper 2 May/June hour 30 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. You may use an HB pencil for any diagrams, graphs or rough working. Do not use staples, paper clips, 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. The total number of marks for this paper is 80. The syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate. This document consists of 9 printed pages and 3 blank pages and 1 Insert. DC (LEG) 97974/2 [Turn over

62 2 1 (a) Chris wants to start up a new business. Identify and explain two ways Governments can support new business start-ups. Way 1:... Way 2:......[8] 0450/23//M/J/15

63 3 (b) Chris will need to communicate with his suppliers when ordering ingredients. Consider the advantages and disadvantages of three methods he could use to communicate with his suppliers. Recommend the best method for him to choose if the order is urgent. Justify your answer. Method 1:... Method 2:... Method 3:... Recommend the best method to use when the order is urgent:......[12] 0450/23//M/J/15 [Turn over

64 4 2 (a) Identify and explain two reasons why marketing is important to CB when Chris starts his new business. Reason 1:... Reason 2:......[8] 0450/23//M/J/15

65 5 (b) Chris has to decide on the place part of his marketing mix. Consider the advantages and disadvantages of the three following methods of distributing his biscuits to the target market. Recommend which will be the best one to use. Justify your choice. Selling through his own stalls in shopping malls:... Selling through a website: Selling to large supermarkets:... Recommendation:......[12] 0450/23//M/J/15 [Turn over

66 6 3 (a) Chris knows quality will be very important when producing his products. Identify and explain two ways Chris could achieve quality production. Way 1:... Way 2:......[8] 0450/23//M/J/15

67 7 (b) Chris has two options to start up his business. Consider Option A and Option B. Recommend which option he should choose. Justify your answer by calculating the profitability of each of the two options. Option A:... Option B:... Recommendation:......[12] 0450/23//M/J/15 [Turn over

68 8 4 (a) Governments pass laws which affect businesses such as minimum wage laws. Identify and explain two legal controls (other than minimum wage laws) which could affect Chris s new business. Legal control 1:... Legal control 2: [8] 0450/23//M/J/15

69 9 (b) Chris is thinking of starting his business as a partnership rather than as a sole trader or a private limited company. Explain why the following three factors are important to Chris when deciding on the type of business organisation to choose. Do you think Chris s decision to start his business as a partnership is the right one? Justify your answer. Liability:... Finance:... Owner s experience in managing a business:... Conclusion:......[12] 0450/23//M/J/15

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72 12 BLANK PAGE Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the publisher will be pleased to make amends at the earliest possible opportunity. To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge International Examinations Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download at after the live examination series. Cambridge International Examinations is part of the Cambridge Assessment Group. Cambridge Assessment is the brand name of University of Cambridge Local Examinations Syndicate (UCLES), which is itself a department of the University of Cambridge. 0450/23//M/J/15