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P R E L I M I N A R Y E X A M I N AT I O N

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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.

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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.

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(a) From the diagram, which two business ???keys??™ to success are missing 2
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(b) Explain how the five ???keys??™ to success can help a small business succeed. 3
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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
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(b) Explain the purpose of having a cash flow statement. 1
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(c) Calculate the total inflows and outflows for Paradise Cuisine in June 2006. 1
Hence, determine how much cash inflow came from home delivery.
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??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦…………….

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.
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(d) Suggest and explain TWO reasons how the liquidity of Paradise Cuisine 5
can increase, and why this would be beneficial to the business.
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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.
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??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦…………….

(d) Explain how businesses with high span control ratios can successfully 6
implement Total Quality Management practices.
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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
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??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦…………….

(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.
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Marks
Question 25 (10 marks)

(a) Briefly define the term ???entrepreneur??™. 1
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??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦??¦…………….

(b) Explain TWO personal qualities an entrepreneur needs to be successful. 2
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(c) How can entrepreneur use sources of information to their advantage 3
to achieve a competitive advantage when establishing a business
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(d) Outline TWO legal considerations a business needs to consider when 4
establishing a business.
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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

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