Business 7115 · O Level · Business finance: needs and sources
Business finance: needs and sources — practice question
Five years ago, Adele set up a dance school. Each year she pays herself a salary and earns $1000 profit. The school provides a range of dance and exercise classes for children. It is operated as a sole trader business. Adele thinks that choosing the correct pricing method matters. She plans to grow the business by opening a second dance school. According to her business plan, she expects this to cost $8000. Adele cannot decide whether a bank loan is the best source of finance for this expansion.
(a)[2]
Identify any two features of a sole trader business.
(b)[2]
Identify two of the principal sections in a business plan.
(c)[4]
Identify and explain two reasons why the correct pricing method is important for Adele’s business.
(d)[6]
Identify and explain two location factors that Adele ought to consider when choosing a second school.
(e)[6]
Do you think a bank loan is the best source of finance for Adele to use when expanding the business? 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: “Retains all profits” …