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[pic] P R E L I M I N A R Y E X A M I N AT I O N Business Studies General Instructions • Reading time – 5 minutes • Working time – 2[pic] hours • Write using black or blue pen Section I 20 marks Allow about 25 minutes for this section 1 What is a stakeholder' A) Any body that has a general interest in the business B) The lack of sufficient funds to operate a business normally C) A part owner in a business D) Items that add value to a product 2 Which of the following is a stage in the business life cycle that achieves the least sales in theory' (A) Growth (B) Maturity (C) Steady State (D) Renewal 3 How many workers would there be if the span of control of general managers is 2 and there were only general managers and CEO in the business' (A) 2 (B) 3 (C) 4 (D) 8 4 Firenzy Cotton Ear Retailers decided to takeover David Cotton Manufacturers. What is this known as' A) Diversification B) Horizontal Integration C) Backward Vertical Integration D) Forward Vertical Integration Use the following information to answer questions 5 and 6. [pic] 5 Calculate the Shareholder’s Funds for Correct Printing. (A) $25,000 (B) $40,000 (C) $60,000 (D) $90,000 6 Correct Printing’s owner has decided to invest more of his money into the business. Which is the following is MOST likely to occur' (A) An increase in Current Assets (B) A decrease in Non-current Assets (C) An increase in Shareholder’s Funds (D) A decrease in Current Liabilities 7 Which of the following is a characteristic of a Process Layout design building' (A) A sequential arrangement of machines (B) Distinct work stations (C) The storage of raw materials and inventories (D) The grouping of machines that carry similar tasks 8 Targeting high income earners is targeting which market segment' (A) Demographic (B) Geographic (C) Psychographic (D) Product-related 9 Personal selling comes under which market mix' A) Price B) Product C) Promotion D) Place 10 Which is the following is the prime function of a revenue statement' A) To help businesses to calculate how much profit is being made B) To show a measure of liquidity of the business’ assets C) To show how much of their target market is responding to the business’ advertising D) To provide goods and services 11 Natural Arbitration is under which step of the human resource cycle' (A) Separation (B) Maintenance (C) Development (D) Acquisition 12 Which of the following events occurred the latest' A) Anti-Discrimination Act B) Affirmative Action Act C) Work Choices Act D) Occupation Health and Safety Act 13 For a manufacturing firm to be a medium sized business, how man employees does it need to have' A) 1-5 B) 100-500 C) 20-50 D) 500+ 14 A business, Firenzy Ear Specialists, decides to increase its price dramatically as it is the only business to provide state of the art huge ears. What pricing strategy is this known as' (A) Penetration Pricing (B) Psychological Pricing (C) Price Skimming (D) Meet-the-Competition Pricing 15 An employer, David, has just sacked its worker Vuong, for ‘producing 1 less red hair dye’ on Thursday. What rights does Vuong have in term of keeping her job' A) No rights B) Bring David to court in terms of the Equal Opportunity Act C) Bring David to court in terms of the Anti-Discrimination Act D) The right to remain silent 16 What is the name given to the introduction of government policies that concern industry' A) Deregulation B) Gearing C) Regulation D) Dividend 17 Which of the following is NOT Debt Finance' A) Overdraft B) Mortgage C) Leasing D) Personal Loan 18 Which of the following is a term given to a person that manages assets of a business on behalf of the beneficiaries' (A) Trustee (B) Franchisor (C) Entrepreneur (D) Sole Trader 19 Which of the following can help to avoid overextending financially' (A) A big start (B) Avoiding overdependence on debt financing (C) Short term financial planning the business (D) No business planning 20 Which one of the following do businesses NOT use to achieve a competitive advantage' (A) Place (B) Price (C) Value (D) Benefits Section II 40 marks Allow about 45 minutes for this section Answer this section on the lines provided. Marks Question 21 (5 marks) Use the diagram below to answer the questions following it. [pic] (a) From the diagram, which two business ‘keys’ to success are missing' 2 ……………………………………………................ ……………………………………………................ (b) Explain how the five ‘keys’ to success can help a small business succeed. 3 ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ Marks Question 22 (10 marks) Use the following financial statement to answer the questions following it. Paradise Cuisine Cash Flow Statement for last quarter 2006 | April May June | | | |Cash Inflows | |Sales: | | retail 43,000 47,000 57,700 | | home delivery 13,330 16,000 ''' | | | |Total Inflows 56,330 63,000 ''' | | | | | |Cash Outflows | |Raw Materials 7,000 9,000 11,110 | |Delivery Costs 800 1,100 1,400 | |Rent 21,670 21,670 21,670 | |Wages 22,500 22,500 22,500 | |Other 4,160 4,200 4,300 | | | |Total Outflows 56,130 58,470 ''' | | | | | |Cash Surplus/ 200 4,350 16,020 | |(Deficit) | (a) Briefly explain the meaning of a cash flow statement. 1 ……………………………………………................ ……………………………………………................ (b) Explain the purpose of having a cash flow statement. 1 ……………………………………………................ ……………………………………………................ (c) Calculate the total inflows and outflows for Paradise Cuisine in June 2006. 1 Hence, determine how much cash inflow came from home delivery. ……………………………………………................ ……………………………………………................ Question 22 continues on page 9 Marks Question 22 (continued) (c) Suggest and explain ONE reason on how the cash surplus could be higher 2 for the next quarter. ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ (d) Suggest and explain TWO reasons how the liquidity of Paradise Cuisine 5 can increase, and why this would be beneficial to the business. ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ End of Question 22 Marks Question 23 (10 marks) (a) What is quality management' 1 ……………………………………………................ ……………………………………………................ (b) Which country did the Total Quality Management practice originate from' 1 ……………………………………………................ (c) List the four main underlying principles Total Quality Management is based 2 on. ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ (d) Explain how businesses with high span control ratios can successfully 6 implement Total Quality Management practices. ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ Marks Question 24 (5 marks) |“Marketing is essential for your business survival and growth. It’s such an important aspect of operating| |a successful business that you can’t afford not to have at least a working knowledge of the various | |aspects of it. | |Marketing is all about getting your products to the right people. And advertising is a key element of | |marketing.  You can get your message out to the right people through a variety of advertising means, | |including mail, the internet, newspapers, magazines, television, radio and the Yellow Pages. | |Take care that your advertising gives your customers accurate and truthful information about your | |business.” | (a) What is ‘marketing’' 1 ……………………………………………................ ……………………………………………................ (b) With reference to the quote above, explain how this quote would be 4 interesting to businesses who do not only rely on advertising as a promotional strategy alone. Provide at least TWO other ways of promoting a business besides advertising. ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ Marks Question 25 (10 marks) (a) Briefly define the term ‘entrepreneur’. 1 ……………………………………………................ ……………………………………………................ (b) Explain TWO personal qualities an entrepreneur needs to be successful. 2 ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ (c) How can entrepreneur use sources of information to their advantage 3 to achieve a competitive advantage when establishing a business' ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ (d) Outline TWO legal considerations a business needs to consider when 4 establishing a business. ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ ……………………………………………................ Section III 20 marks Attempt Question 26 Allow about 40 minutes for this section In your answer you will be assessed on how well you: ■ use your knowledge and the information provided ■ communicate using relevant business terminology and concepts ■ present a logical, well-structured answer to the question in the form of a business report Answer the question in a SEPARATE writing booklet. Extra writing booklets are available. Question 26 (20 marks) [pic] Using the above stimulus and your own knowledge of Business Studies, outline the ethical and social responsibilities of a business. Describe the pressures influencing ethical decision making. Section IV 20 marks Attempt ONE question from Questions 27-28 Allow about 40 minutes for this section In your answer you will be assessed on how well you: ■ use your knowledge and relevant business case study/studies ■ communicate using relevant business terminology and concepts ■ present a logical, well-structured answer to the question Answer the question in a SEPARATE writing booklet. Extra writing booklets are available. Question 27 (20 marks) In relation to your case study, explain the stages of each life cycle, and business life cycle challenges faced by business during each phase. How do businesses overcome these obstacles' OR Question 28 (20 marks) [pic] In relation to your case study, describe the economic and social factors businesses are faced with, and how businesses can sustain a competitive advantage through these times. End of Exam ----------------------- Total marks – 100 Section I 20 marks Attempt Questions 1-20 Allow about 25 minutes for this section Section II 40 marks Attempt Questions 21-25 Allow about 45 minutes for this section Section III 20 marks Attempt Question 26 Allow about 40 minutes for this section Section IV 20 marks Attempt either Question 27 OR Question 28 Allow about 40 minutes for this section Reproduced without the permission of business.gov.au Sales ($) Time Renewal Steady State Decline Establishment Growth Maturity Post Maturity