CAIE IGCSE Business Studies 5.1 Business Finance Questions

Award 1 mark for each relevant reason for needing short-term/long-term finance (max 1 for each).

Award 1 mark for each relevant reference to this business (max 1 for each).

Points might include:

Short-term finance:

- Pay day-to-day expenses/provide working capital [k] for this private sector business [app]

- Pay wages/salary [k] of his 2 employees [app]

- Purchase inventory [k]

- To prevent cash-flow problem/improve the cash position [k]

Long-term finance:

- Purchase non-current assets or examples [k] for the repair business [app]

- Fund expansion/growth [k] in case he decides not to keep the business small [app]

- Fund takeover of another business [k]

- Develop new products/services [k]

Other appropriate responses should be credited.

To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made.

The following words are likely to be appropriate for this question:

- (Car) repair / garage or examples

- 2 workers

- Full-time (employees)

- Private sector business

- Economic recession

- Small business

- Added value

Other appropriate examples can be credited.

Award 1 mark for each relevant source of finance [max 2].

Award 1 mark for each relevant reference to this business [max 2].

Award 1 mark for each relevant explanation [max 2].

Points might include:

- Retained profits [k] from the hotel [app] as does not need to pay it back [an]

- Bank loans [k] to obtain a large amount of money/varying length of time to repay/quick to arrange [an] for the luxury service [app]

- Own(er) savings [k] from the 2 partners [app] as may be readily accessible/no interest to pay [an]

- Crowdfunding [k] as no interest to pay [an]

Other appropriate responses should be credited.

To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made.

The following words are likely to be appropriate for this question:

- (New) hotel or related words such as rooms

- (2) partners/partnership

- Luxury

- Niche market

- Different city

- Market research

Other appropriate examples can be credited.

Award 1 mark for each relevant reason (max 2).

Award 1 mark for each relevant reference to this business (max 2).

Points might include:

Short-term finance:

- To pay day-to-day costs/working capital [k] when making clothes [app]

- Improve cash flow position/liquidity [k] of the multinational company [app]

- Meet any unexpected emergencies/opportunities [k]

Long-term finance:

- Fund expansion/growth [k] such as the new factory [app]

- Purchase non-current assets [k] in one of the 4 countries [app]

- Develop new products [k]

Other appropriate responses should be credited.

To use words from the stem as application, the reference must be appropriate (i.e. make sense) in relation to the point being made.

The following words are likely to be appropriate for this question:

- Multinational company

- Clothes or related words such as shirts, trousers

- Manufacturer

- Mass market

- Factory

- 4 countries

- $ 140 million (working capital)

- $ 280 million (current liabilities)

- $ 400 million (non-current liabilities)

Other appropriate examples can be credited.