Business 0450 · IGCSE · Business finance

Business finance — practice question

(a)[8]

Explain why liquidity and profitability matter to a business.

(b)[12]

Consider the advantages and disadvantages of the three sales promotion methods Gemma could use for the new shop. Recommend which method Gemma should choose to maximise revenue. Justify your answer. • Buy one, get 50% off second purchase • 10% off everything in the shop for one week after opening • Pay a celebrity to open the shop

Worked solution & mark scheme

This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: Liquidity lets a business check whether it can repay short-term debts

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