Business 0450 · IGCSE · Cash-flow forecasting and working capital
Cash-flow forecasting and working capital — practice question
Veronique feels bored by her job in a large factory. Because she is creative, she wants to resign and open a flower shop. She has asked about micro-finance and drawn up a cash flow forecast; an extract appears in Table 3.1. Veronique has also done some market research and discovered that demand for flowers is likely to be high at festival times. She believes she has the right qualities to become a successful entrepreneur.
(a)[2]
Define ‘micro-finance’ in one sentence.
(b)[2]
Veronique now expects the cash inflow in month 3 to be $1 500$. Calculate the:
New net cash flow in month 3.
New closing balance in month 3.
(c)[4]
State four reasons why a business may experience cash flow problems.
(d)[6]
Explain one primary market research method and one secondary market research method Veronique could have used.
(e)[6]
Do you think creativity is the most important characteristic of being a successful entrepreneur? 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: “Offers financial services/small loans to poor people who are not reached by traditional banks” …