business studies_alevel_nov_paper2

Extracted Content: business studies_alevel_nov_paper2

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ZIMBABWE SCHOOL EXAMINATIONS COUNCIL

General Certificate of Education Advanced Level

BUSINESS STUDIES 6025/2
PAPER 2

NOVEMBER 2018 SESSION 3 hours

TIME 3 hours
INSTRUCTIONS TO CANDIDATES

Wnite your name, Centre number and candidate number in the spaces provided on the answer
paper/answer booklet.

Answer all questions in Section A and any three from Section B.

Write your answers on the separate answer paper provided.

If you use more than one sheet of paper, fasten the sheets together,

INFORMATION FOR CANDIDATES

The number of marks is given in brackets [ ] at the end of each question or part question.
You are advised to spend not more than 45 minutes on Section A.

The businesses described in this paper are entirely fictitious.

You are reminded of the need for good English and clear Presentation in your answers.

Calculators may be used.

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Read the passage below and answer the questions that follow.
E & K Fisheries

Emma and Kero worked for an airliner for eight years. Upon retrenchment, they decided to
run a fishery business under the partnership name E & K Fisheries, By the end of the third
year, E & K Fisheries had become a force to reckon with in the fishing industry.

Motivated by their current market position, Emma and Kero are now considering the idea of
opening a second branch. The forecasted cash flows and discounting factors for the first four
years of operation of this branch are shown below.

(300 000)
4 K

90 000

Discount factors at 10%

These are forecasted cash flows which will be used to determine the Net Present
Value and Payback Period for the venture

To raise the $300 000 initial capital needed for the second branch, Emma and Kero

have agreed to incorporate
(a) With the aid of an appropriate example, explain the meaning of the term
payback period. [3]
(b) (i) Using information from the passage, calculate the Net Present
Value (NPV) of opening a second branch. [3]
(ii) | Comment on the usefulness of Net Present Value to E & K
Fisheries when making investment decisions. [5]
(c) Explain other factors that might influence Emma and Kero’s final
decision on whether or not to open the new branch, [4]
(d) _ Assess the benefits to E & K Fisheries of incorporation. [10]

6028/2 N2O18

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[10]
to involve its workforce
- most important factor in the marketing of a product.”
nee Se oi dbcon [25]
ys an Operations Manager might use to improve capacity
| [10]
1¢ benefits of employing a capital intensive production process
phone manufacturer. [15]
‘some firms present window-dressed accounts? [10]
b examine the significance of a business’ published accounts to
(15]
extent is the concept of elasticity of demand useful to a manufacturer of
[25]
[8]
of critical path analysis in production planning
fs i : [17]

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