Business 0450 · IGCSE · Cash-flow forecasting and working capital
Cash-flow forecasting and working capital — practice question
Four years ago, Asmaa used a government grant to establish a small car repair business. She now employs 3 full-time workers. It matters to Asmaa that her employees remain highly motivated. She believes the business has gained from a low unemployment rate in the economy. Asmaa is checking her cash-flow forecast. A section is shown in Table 2.1. She wants to find out how the closure of a rival and a rise in the minimum wage rate could alter her forecast.
(a)[2]
Define the term unemployment.
(b)[2]
Identify one cash inflow and one cash outflow that a business could have.
(c)[4]
Outline one benefit and one drawback to Asmaa of using a government grant as a source of finance.
(d)[6]
Explain how the following changes could affect Asmaa’s cash-flow forecast.\n\nClosure of a competitor:\n\nIncrease in the minimum wage rate:
(e)[6]
Explain two non-financial methods that a small tertiary sector business could use to keep its employees highly motivated. Justify which one should be chosen.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “People who want to work but cannot get a job” …