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0450 s14 qp_11

Anouk runs a sole proprietorship making and selling jewelry. She uses rented equipment and sells at local markets. Last year sales increased by $500 to $3000. She plans to spend $50 on marketing and do primary research. Some disadvantages of a business partner include conflict and shared responsibility. Local newspaper advertising is recommended over leaflets to promote her jewelry due to lower cost and ability to reach more potential customers.

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This document consists of 11 printed pages and 1 blank page. DC (CW/SW) 79706/2 © UCLES 2014 [Turn over Cambridge International Examinations Cambridge International General Certificate of Secondary Education *4296998068* BUSINESS STUDIES 0450/11 Paper 1 May/June 2014 1 hour 45 minutes Candidates answer on the Question Paper. No Additional Materials are required. 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. 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 syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate.
2 0450/11/M/J/14© UCLES 2014 1 Anouk is a sole trader. She designs and makes jewellery at home, using hired (rented) equipment. Anouk enjoys selling the jewellery at local markets. Last year her sales revenue increased by $500 to $3000. She plans to use $50 for a marketing budget. Anouk would like to do some primary market research when she has time. Anouk thinks she should have a business partner. (a) What is meant by a ‘marketing budget’? ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[2] (b) Identify two methods of primary market research that Anouk could use. Method 1: .................................................................................................................................. Method 2: ..............................................................................................................................[2] (c) Identify and explain two possible advantages for Anouk of hiring equipment. Advantage 1: ............................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... Advantage 2: ............................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ...............................................................................................................................................[4]
3 0450/11/M/J/14© UCLES 2014 [Turn over (d) Identify and explain two disadvantages to Anouk of having a business partner. Disadvantage 1: ........................................................................................................................ ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... Disadvantage 2: ........................................................................................................................ ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) Anouk could use either leaflets or local newspaper advertising as methods of promoting her jewellery. Recommend which method you think Anouk should use. Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
4 0450/11/M/J/14© UCLES 2014 2 Keypeople is a recruitment agency which only operates in one small town in country Z. Its owner, Rachel, and her two employees know that good customer service is important. Rachel would like to expand her business. Keypeople offers a variety of human resource services to other businesses, such as recruiting employees and preparing employment contracts. Rachel has been asked by a local manufacturing business to recruit a senior manager. (a) Identify two examples of tertiary sector business activity in your country, other than a recruitment agency. Example 1: ................................................................................................................................ Example 2: ............................................................................................................................[2] (b) Identify two reasons why good customer service is important for Keypeople. Reason 1: ................................................................................................................................. ................................................................................................................................................... Reason 2: ................................................................................................................................. ...............................................................................................................................................[2] (c) Identify and explain two reasons why employment contracts are used by businesses. Reason 1: .................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... Reason 2: .................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ...............................................................................................................................................[4]
5 0450/11/M/J/14© UCLES 2014 [Turn over (d) Identify and explain two stages in the recruitment process of the manager’s job for the manufacturing business. Stage 1: .................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... Stage 2: .................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) Do you think Rachel should expand Keypeople? Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
6 0450/11/M/J/14© UCLES 2014 3 HPT makes frozen food products.The Finance Director wants to improve HPT’s cash flow position. Table 1 is an incomplete cash flow forecast for the next 3 months.The Finance Director thinks HPT should not use expensive packaging. He is also worried that new Government health & safety laws will not benefit the company and will only add to its costs. Table 1: Cash flow forecast ($000’s) Month 1 Month 2 Month 3 Opening balance (50000) (30000) (40000) Cash inflows 200000 180000 200000 Cash outflows: Wages 60000 60000 60000 Packaging 20000 20000 20000 Raw materials 45000 55000 45000 Fixed costs 55000 55000 55000 Total cash outflows X 190000 180000 Net cash flow 20000 Y 20000 Closing balance (30000) (40000) (20000) Note: numbers in brackets are negative. (a) Identify two fixed costs that HPT might have. Fixed cost 1: .............................................................................................................................. Fixed cost 2: ..........................................................................................................................[2] (b) Calculate the following. Month 1 total cash outflows (X): ................................................................................................ ................................................................................................................................................... Month 2 net cash flow (Y): ........................................................................................................ ...............................................................................................................................................[2] (c) Identify and explain two benefits to HPT of having a cash flow forecast. You should refer to Table 1 in your answer. Benefit 1: ................................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... Benefit 2: ................................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ...............................................................................................................................................[4]
7 0450/11/M/J/14© UCLES 2014 [Turn over (d) Identity and explain two reasons why packaging might be important for HPT. Reason 1: ................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... Reason 2: ................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) The Finance Director is worried that new Government health & safety laws will not benefit the company and will only add to its costs. Do you agree? Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
8 0450/11/M/J/14© UCLES 2014 4 The economy of country U is in recession. The Government has cut interest rates to attract businesses to set up in country U. JWR is a large multinational energy company. JWR may decide to open a power station in country U.The Government thinks that opening a new power station will create many external benefits. Some pressure groups do not want companies like JWR operating in their country. (a) Identify two features of a recession. Feature 1: .................................................................................................................................. ................................................................................................................................................... Feature 2: .................................................................................................................................. ...............................................................................................................................................[2] (b) Identify two effects of a cut in interest rates on businesses like JWR. Effect 1: ..................................................................................................................................... ................................................................................................................................................... Effect 2: ..................................................................................................................................... ...............................................................................................................................................[2] (c) Identify and explain two actions that pressure groups could use to influence JWR’s decision. Action 1: .................................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... Action 2: .................................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ...............................................................................................................................................[4]
9 0450/11/M/J/14© UCLES 2014 [Turn over (d) Identify and explain two external benefits as a result of opening a new power station in country U. External benefit 1: ..................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... External benefit 2: ..................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) Do you think that the Government of country U should try to attract multinational businesses? Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
10 0450/11/M/J/14© UCLES 2014 5 Callow is a large retail business based in country X.‘Our employees are an important stakeholder’, said the Managing Director. ‘To make sure we stay profitable we need to motivate them.’ Callow trains all of its shop employees by using off the job training. Fig. 1: Callow Organisation Structure Managing Director HR Director Finance Director West Region Manager South Region Manager North Region Manager East Region Manager Operations Director Marketing Director Shop Managers × 6 Department Managers × 4 Supervisors × 2 Sales Assistants × 8 (a) Identify two stakeholder groups, other than employees. Stakeholder group 1: ................................................................................................................. Stakeholder group 2: .............................................................................................................[2] (b) Identify two functions of management that each shop manager will have to perform. Function 1: ................................................................................................................................ Function 2: ............................................................................................................................[2] (c) Identify and explain two features of Callow’s organisational structure. Feature 1: .................................................................................................................................. Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... Feature 2: .................................................................................................................................. Explanation: .............................................................................................................................. ................................................................................................................................................... ...............................................................................................................................................[4]
11 0450/11/M/J/14© UCLES 2014 (d) Identify and explain two possible methods that Callow could use to improve the motivation of its employees. Method 1: .................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... Method 2: .................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) Do you think it is a good idea for Callow to use off the job training for all its shop employees? Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
12 0450/11/M/J/14© UCLES 2014 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. 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.

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0450 s14 qp_11

  • 1.
    This document consistsof 11 printed pages and 1 blank page. DC (CW/SW) 79706/2 © UCLES 2014 [Turn over Cambridge International Examinations Cambridge International General Certificate of Secondary Education *4296998068* BUSINESS STUDIES 0450/11 Paper 1 May/June 2014 1 hour 45 minutes Candidates answer on the Question Paper. No Additional Materials are required. 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. 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 syllabus is approved for use in England, Wales and Northern Ireland as a Cambridge International Level 1/Level 2 Certificate.
  • 2.
    2 0450/11/M/J/14© UCLES 2014 1Anouk is a sole trader. She designs and makes jewellery at home, using hired (rented) equipment. Anouk enjoys selling the jewellery at local markets. Last year her sales revenue increased by $500 to $3000. She plans to use $50 for a marketing budget. Anouk would like to do some primary market research when she has time. Anouk thinks she should have a business partner. (a) What is meant by a ‘marketing budget’? ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[2] (b) Identify two methods of primary market research that Anouk could use. Method 1: .................................................................................................................................. Method 2: ..............................................................................................................................[2] (c) Identify and explain two possible advantages for Anouk of hiring equipment. Advantage 1: ............................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... Advantage 2: ............................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ...............................................................................................................................................[4]
  • 3.
    3 0450/11/M/J/14© UCLES 2014[Turn over (d) Identify and explain two disadvantages to Anouk of having a business partner. Disadvantage 1: ........................................................................................................................ ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... Disadvantage 2: ........................................................................................................................ ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) Anouk could use either leaflets or local newspaper advertising as methods of promoting her jewellery. Recommend which method you think Anouk should use. Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
  • 4.
    4 0450/11/M/J/14© UCLES 2014 2Keypeople is a recruitment agency which only operates in one small town in country Z. Its owner, Rachel, and her two employees know that good customer service is important. Rachel would like to expand her business. Keypeople offers a variety of human resource services to other businesses, such as recruiting employees and preparing employment contracts. Rachel has been asked by a local manufacturing business to recruit a senior manager. (a) Identify two examples of tertiary sector business activity in your country, other than a recruitment agency. Example 1: ................................................................................................................................ Example 2: ............................................................................................................................[2] (b) Identify two reasons why good customer service is important for Keypeople. Reason 1: ................................................................................................................................. ................................................................................................................................................... Reason 2: ................................................................................................................................. ...............................................................................................................................................[2] (c) Identify and explain two reasons why employment contracts are used by businesses. Reason 1: .................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... Reason 2: .................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ...............................................................................................................................................[4]
  • 5.
    5 0450/11/M/J/14© UCLES 2014[Turn over (d) Identify and explain two stages in the recruitment process of the manager’s job for the manufacturing business. Stage 1: .................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... Stage 2: .................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) Do you think Rachel should expand Keypeople? Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
  • 6.
    6 0450/11/M/J/14© UCLES 2014 3HPT makes frozen food products.The Finance Director wants to improve HPT’s cash flow position. Table 1 is an incomplete cash flow forecast for the next 3 months.The Finance Director thinks HPT should not use expensive packaging. He is also worried that new Government health & safety laws will not benefit the company and will only add to its costs. Table 1: Cash flow forecast ($000’s) Month 1 Month 2 Month 3 Opening balance (50000) (30000) (40000) Cash inflows 200000 180000 200000 Cash outflows: Wages 60000 60000 60000 Packaging 20000 20000 20000 Raw materials 45000 55000 45000 Fixed costs 55000 55000 55000 Total cash outflows X 190000 180000 Net cash flow 20000 Y 20000 Closing balance (30000) (40000) (20000) Note: numbers in brackets are negative. (a) Identify two fixed costs that HPT might have. Fixed cost 1: .............................................................................................................................. Fixed cost 2: ..........................................................................................................................[2] (b) Calculate the following. Month 1 total cash outflows (X): ................................................................................................ ................................................................................................................................................... Month 2 net cash flow (Y): ........................................................................................................ ...............................................................................................................................................[2] (c) Identify and explain two benefits to HPT of having a cash flow forecast. You should refer to Table 1 in your answer. Benefit 1: ................................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... Benefit 2: ................................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ...............................................................................................................................................[4]
  • 7.
    7 0450/11/M/J/14© UCLES 2014[Turn over (d) Identity and explain two reasons why packaging might be important for HPT. Reason 1: ................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... Reason 2: ................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) The Finance Director is worried that new Government health & safety laws will not benefit the company and will only add to its costs. Do you agree? Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
  • 8.
    8 0450/11/M/J/14© UCLES 2014 4The economy of country U is in recession. The Government has cut interest rates to attract businesses to set up in country U. JWR is a large multinational energy company. JWR may decide to open a power station in country U.The Government thinks that opening a new power station will create many external benefits. Some pressure groups do not want companies like JWR operating in their country. (a) Identify two features of a recession. Feature 1: .................................................................................................................................. ................................................................................................................................................... Feature 2: .................................................................................................................................. ...............................................................................................................................................[2] (b) Identify two effects of a cut in interest rates on businesses like JWR. Effect 1: ..................................................................................................................................... ................................................................................................................................................... Effect 2: ..................................................................................................................................... ...............................................................................................................................................[2] (c) Identify and explain two actions that pressure groups could use to influence JWR’s decision. Action 1: .................................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... Action 2: .................................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ...............................................................................................................................................[4]
  • 9.
    9 0450/11/M/J/14© UCLES 2014[Turn over (d) Identify and explain two external benefits as a result of opening a new power station in country U. External benefit 1: ..................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... External benefit 2: ..................................................................................................................... ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) Do you think that the Government of country U should try to attract multinational businesses? Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
  • 10.
    10 0450/11/M/J/14© UCLES 2014 5Callow is a large retail business based in country X.‘Our employees are an important stakeholder’, said the Managing Director. ‘To make sure we stay profitable we need to motivate them.’ Callow trains all of its shop employees by using off the job training. Fig. 1: Callow Organisation Structure Managing Director HR Director Finance Director West Region Manager South Region Manager North Region Manager East Region Manager Operations Director Marketing Director Shop Managers × 6 Department Managers × 4 Supervisors × 2 Sales Assistants × 8 (a) Identify two stakeholder groups, other than employees. Stakeholder group 1: ................................................................................................................. Stakeholder group 2: .............................................................................................................[2] (b) Identify two functions of management that each shop manager will have to perform. Function 1: ................................................................................................................................ Function 2: ............................................................................................................................[2] (c) Identify and explain two features of Callow’s organisational structure. Feature 1: .................................................................................................................................. Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... Feature 2: .................................................................................................................................. Explanation: .............................................................................................................................. ................................................................................................................................................... ...............................................................................................................................................[4]
  • 11.
    11 0450/11/M/J/14© UCLES 2014 (d)Identify and explain two possible methods that Callow could use to improve the motivation of its employees. Method 1: .................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... Method 2: .................................................................................................................................. ................................................................................................................................................... Explanation: .............................................................................................................................. ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6] (e) Do you think it is a good idea for Callow to use off the job training for all its shop employees? Justify your answer. ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ................................................................................................................................................... ...............................................................................................................................................[6]
  • 12.
    12 0450/11/M/J/14© UCLES 2014 BLANKPAGE 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. 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.