0450 Business Studies June 2025 Question Paper 11

Brendan wants to be a successful entrepreneur. He plans to start up a flower shop using government support. Brendan’s brother has offered to form a business partnership with him. Brendan knows it 1 is important for a new business to use a suitable pricing method. He has already identified ways the business can increase added value. Brendan wants to know how an economic boom might affect his business. Define ‘business partnership’. (a) [2] Identify two ways a government can support business start-ups. (b) Way 1: Way 2: [2] Outline two ways an economic boom might affect Brendan’s business. (c) Way 1: Way 2: [4] , , Explain two ways Brendan could increase added value for his business. (d) Way 1: Explanation: Way 2: Explanation: [6] Explain two pricing methods a new business might use. Which is likely to be the best method to use? Justify your answer. (e) [6] , ,

NSL is a business based in country X. It manufactures food products including bread and breakfast cereals. NSL uses lean production in its factory. Maintaining quality is important. NSL imports 15% 2 of its raw materials. Changes in country X’s exchange rate can affect businesses which import raw materials. NSL’s Marketing Manager knows the business should respond to changes in consumer spending patterns. She is aware that market research can be used to help make business decisions. Identify one way each of the following changes in country X’s exchange rate might affect businesses which import raw materials. (a) Depreciation: Appreciation: [2] Identify two reasons why consumer spending patterns might change. (b) Reason 1: Reason 2: [2] Outline two reasons why maintaining quality is important for NSL. (c) Reason 1: Reason 2: [4] , , Explain two benefits to NSL of using lean production. (d) Benefit 1: Explanation: Benefit 2: Explanation: [6] Explain two methods of market research a business could use to help make business decisions. Which is likely to be the best method for a manufacturing business to use? Justify your answer. (e) [6] , ,

LFK is a coal-mining business. It has 135 employees who are all provided with training. After the dismissal of one of LFK’s employees there is a job vacancy for a new supervisor. External recruitment 3 will be used. The Managing Director is preparing a cash flow forecast for LFK. An extract is shown in Table 3.1. Table 3.1 Extract from LFK’s cash flow forecast July - September 2025 $000 September August July 730 400 600 Cash inflow 590 X 720 Cash outflow 140 (100) (120) Net cash flow (180) (80) 40 Opening balance Y (180) (80) Closing balance Define ‘dismissal’. (a) [2] Calculate the value of X and Y. (b) X: Y: [2] , , Identify four reasons why a cash flow forecast might be useful to a business. (c) Reason 1: Reason 2: Reason 3: Reason 4: [4] Explain two advantages of LFK training its employees. (d) Advantage 1: Explanation: Advantage 2: Explanation: [6] , , Do you think the advantages of external recruitment for a business are greater than the disadvantages? Justify your answer. (e) [6] , ,

PKN manufactures glass. Contributing to sustainable development is important to the business. PKN has factories in 30 countries. It has 27000 employees. The Managing Director knows PKN 4 has benefited from globalisation. She plans to expand the business using external growth. Retained profit is one source of finance a business could use to fund expansion. Some of PKN’s directors are concerned about possible diseconomies of scale as the business grows. Identify two methods of external growth a business might use. (a) Method 1: Method 2: [2] Identify two reasons for globalisation. (b) Reason 1: Reason 2: [2] Outline two ways PKN could contribute to sustainable development. (c) Way 1: Way 2: [4] , , Explain two diseconomies of scale which might affect PKN as it grows. (d) Diseconomy 1: Explanation: Diseconomy 2: Explanation: [6] Do you think the advantages of using retained profits to fund business expansion are greater than the disadvantages? Justify your answer. (e) [6] , ,