Business 9609 · AS & A Level · Operations strategy

Operations strategy — practice question

(a)[3]

Using Table 1, Calculate the forecast profit margin for the reusable bottles.

(b)[3]

Using lines 44–49, Calculate the gearing ratio on the assumption that the extra $0.5m finance for the factory extension is raised through a bank loan.

(c)[12]

Refer to your results in 2(a), 2(b) and any other information. Recommend whether C4T should accept the offer from the venture capitalist. Justify your recommendation.

Worked solution & mark scheme

This 18-mark question has a full step-by-step worked solution and mark scheme. One marking point: Calculate operating profit by taking Sales revenue minus Operating costs (390,000 - 290,000 = 100,000).

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