Business 0450 · IGCSE · Enterprise, business growth and size
Enterprise, business growth and size — practice question
RJJ makes women’s shoes. It markets the shoes to a niche market through e-commerce. RJJ is a public limited company, so its shareholders enjoy limited liability. The Managing Director is intending to grow the business. RJJ could acquire a competitor. Profit fell by $50 000 last year. The Finance Director must choose a source of finance to pay for the expansion.
(a)[2]
Define the term ‘limited liability’.
(b)[2]
Define the term ‘niche market’.
(c)[4]
Outline two advantages to consumers of buying RJJ’s products through e-commerce.
(d)[6]
Explain two factors that RJJ’s Finance Director ought to think about when choosing a source of finance for the expansion.
(e)[6]
Do you think a takeover of a competitor is the best way for a large business to grow? Justify your response.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “The liability of shareholders/owners in a company is restricted to the sum they invested” …