Tag: KS4

In September 2021, Electromac launched three new PearPhones with features such as fingerprint registration technology, better cameras, and a range of seasonal colours.

The main reason for Electromac to launch new PearPhones is to ……?

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This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

1. Not correct – these PearPhones has more features and comes in a range of colours that may mean Electromac will
   require more suppliers.
2. Correct – Definition of product portfolio e.g. the range of products or services offered by a business. The new PearPhones are different from the existing models on the market/possible extension strategy. Which increases the total number of products available and is more likely to appeal to a wider range of Customers.
3. Not correct – Electromac will have to increase rather than decrease its advertising budget in order to promote the new and wider range of PearPhones.
4. Not correct – income elasticity of demand is affected by external factors such as the state of the economy and not by decisions that Electromac might make about its product range.

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The number of people aged under 30 in Ruritania is increasing each year.

Mumthings plc, a retailer of products for babies and children, is opening new stores in Ruritania.

Which one of the following factors is most likely to have influenced this decision by Mumthings plc?

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This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

1. Not correct – e-commerce would not require Mumthings to open new stores in Ruritania.
2. Correct – Demographics refers to changes in and the structure of the population. The under 30 population are more likely to have babies and buy Mumthings’s products. This increasing demand comes from demographic change and suggests a growing market for Mumthings.
3. Not correct – ethical factors concern the way Mumthings runs its business, not whether they open stores.
4. Not correct – environmental factors would influence the way Mumthings build and operate new stores in Ruritania, not whether they open new stores.

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Michelle owns and runs a virtual PA business servicing small and medium sized businesses in Staffordshire helping them cope with their routine administration tasks. The business is structured as a sole trader.

Michelle needs a new printer costing £5 000.

Which one of the following would be the MOST appropriate source of finance for Michelle?

Select ONE answer

1. Overdraft
2. Leasing
3. Debenture
4. Trade credit

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

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This multiple-choice question is suitable for Business Studies KS4 & KS5 classes

The answer is 2

1. Not correct – the photocopier will cost £5 000 and an overdraft is usually for small amounts of money or emergencies over a short period of time.
2. Correct – Leasing allows a company to rent the use of a non-current asset, on payment of a regular fee. Michelle has the use of the printer immediately without having to find £5 000 but she will never own the asset, and because she knows what the regular payments will be, and she can be take the planned benefits of leasing agreements e.g. servicing/insurance/upgrades.
3. Not correct – Michelle’s business is not a public limited company and therefore cannot issue debentures.
4. Not correct – trade credit is not designed to purchase large items of capital equipment such as a £5 000 photocopier.

This work is licensed under a Creative Commons Attribution 4.0 International License.