Month: October 2019

Lucy started a business called StaffordWelly. It makes boots with a high heel to appeal to women and festival-goers.

Lucy wanted to expand StaffordWelly but needed additional capital. They appeared on the television programme SharkTank.

One of the venture capitalists (a Dragon) invested £500 000 for a 20% stake in the business.

Which ONE of the following is a disadvantage to Lucy of a venture capitalist investing in her business?

Select ONE answer:

1. Potential conflict between the shareholders
2. The venture capitalist risks losing their investment
3. Higher corporation tax will need to be paid
4. The risk of WedgeWelly failing is reduced

Show the workings to arrive at your answer, and explain and justify your reasons:

Which ONE of the following best describes lateral thinking?

Select ONE answer:

1. Generating ideas using a quantitative approach
2. Detailed planning following a set process
3. Working to a planned timetable
4. Solving problems using a creative approach

Show the workings to arrive at your answer, and explain and justify your reasons:

Which ONE of the following could be the effect on small businesses if interest rates were to rise significantly?

Select ONE answer:

1. Improved net cash flow
2. The risk of insolvency is greater
3. Fixed costs will fall
4. Overdrafts will become cheaper

Show the workings to arrive at your answer, and explain and justify your reasons:

Which ONE of the following could be the effect on small businesses if interest rates were to rise significantly?

Select ONE answer:

1. Improved net cash flow
2. Reduced consumer demand
3. Fixed costs will fall
4. Overdrafts will become cheaper

Show the workings to arrive at your answer, and explain and justify your reasons:

Alex moved from Belgium with his family in 2014 to live in England. In 2016 he set up as a sole trader making unique ice creams, which he only sold to local retailers. His business soon prospered and he moved production to a small factory. Local retailers liked his ice cream as it was different. He realised that this could be the opportunity he was looking for to develop his business further.

Which ONE of the following is likely to lead to repeat purchases?

Select ONE answer:

1. Charging a higher price
2. Increasing ice cream production
3. Introducing a customer loyalty scheme
4. Having customer feedback sheets

Show the workings to arrive at your answer, and explain and justify your reasons: