Business 0450 · IGCSE · Cash-flow forecasting and working capital
Cash-flow forecasting and working capital — practice question
FR is a multinational business with hotels in 18 countries. It is looking to enter a new market and intends to open another hotel. FR’s Marketing Director is thinking about how the market could be divided into segments. FR’s Financial Director is deciding which source of finance should be used to pay for the expansion. He is also preparing a cash-flow forecast for the first year that the new hotel trades.
(a)[2]
State one cash inflow and one cash outflow for a business.
Cash inflow:
Cash outflow:
(b)[2]
Identify two factors that might influence the source of finance a business decides to use.
Factor 1:
Factor 2:
(c)[4]
Identify four ways in which a market can be segmented.
Way 1:
Way 2:
Way 3:
Way 4:
(d)[6]
Explain two advantages FR gains from being a multinational company.
(e)[6]
Explain two ways a cash-flow forecast could be used by a business. Which way is likely to be the most important? Justify your answer.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Sales made for cash” …