2 (a) Which two of the following are external sources of finance?
Select two answers - Edexcel - GCSE Business - Question 2 - 2020 - Paper 1
Question 2
2 (a) Which two of the following are external sources of finance?
Select two answers.
☐ A Loan capital
☐ B Retained profit
☐ C Sales revenue
☐ D Selling assets
☐ E ... show full transcript
Worked Solution & Example Answer:2 (a) Which two of the following are external sources of finance?
Select two answers - Edexcel - GCSE Business - Question 2 - 2020 - Paper 1
Step 1
Which two of the following are external sources of finance?
96%
114 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The correct answers are:
A Loan capital
E Share capital
Loan capital refers to funds borrowed from external sources, while share capital is money raised by issuing shares.
Step 2
Which two of the following are methods of external growth for a business?
99%
104 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
The correct answers are:
C Merger
E Takeover
Both mergers and takeovers involve acquiring other businesses, thus expanding the organization externally.
Step 3
Using the information in Table 1, calculate the gross profit made by the business.
96%
101 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
If the sales revenue is £625,000 and COGS is £145,000, the calculation will be:
625000−145000=480000
Thus, the gross profit made by the business is £480,000.
Step 4
Explain one benefit to a business of withdrawing a product when it enters the decline phase of its product life cycle.
98%
120 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
One benefit is that it allows the business to focus resources on more profitable products. By withdrawing a declining product, the business can concentrate on improving or marketing its successful products. This can lead to better profit margins and a stronger market position.
Step 5
Explain one benefit to a business from improving the aesthetic element of a product's design mix.
97%
117 rated
Only available for registered users.
Sign up now to view full answer, or log in if you already have an account!
Answer
Improving the aesthetic element can make a product more attractive to consumers, potentially leading to increased sales. A product with appealing design distinguishes itself in the marketplace, can justify a higher price, and enhance customer satisfaction, ultimately benefiting the business economically.
