Using the data in Extract D, calculate the values of A, B, and C and, using other non-financial information, evaluate these two options Live the Adventure Ltd should choose in order to grow - Edexcel - A-Level Business - Question 1 - 2019 - Paper 3
Question 1
Using the data in Extract D, calculate the values of A, B, and C and, using other non-financial information, evaluate these two options Live the Adventure Ltd should... show full transcript
Worked Solution & Example Answer:Using the data in Extract D, calculate the values of A, B, and C and, using other non-financial information, evaluate these two options Live the Adventure Ltd should choose in order to grow - Edexcel - A-Level Business - Question 1 - 2019 - Paper 3
Step 1
Calculate A and C
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Answer
To calculate the value of A, we use the sales data from the previous quarters. For the 8-period moving average for 2016 Q4:
A=8(490+550+570+590+610+630+630+320)=590
The value for C (Q4 of 2017) is derived from the quarter sales figure, which is 630.
Step 2
Calculate B
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Answer
To calculate B (the 4 quarter moving average, 2017 Q2), we use the sales figures from the last four quarters (Q1-Q4):
For Q4 of 2016 to Q2 of 2017:
B=4(590+610+630+320)=612.5
Step 3
Evaluate Growth Options
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Answer
Live the Adventure Ltd should consider offering winter activity holidays in Europe. This option diversifies its offerings and potentially attracts a new customer base. Additionally, capturing the winter market can help balance revenue throughout the year, smoothening cash flow. However, entering new markets involves risks, such as understanding local regulations and competition. Maintaining operations in existing locations ensures they continue to leverage their established reputation while exploring new opportunities.
