Business 7115 · O Level · Cash-flow forecasting and working capital
Cash-flow forecasting and working capital — practice question
Veronique feels uninterested in her job in a large factory. Because she is a creative person, she wants to resign and open a flower shop. She has looked into 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 flower demand is expected to be high at festival times. She believes she has the qualities needed to become a successful entrepreneur.
(a)[2]
Define ‘micro-finance’ in a sentence.
(b)[2]
Veronique now expects cash inflow in month 3 to be $1 500. Calculate the revised net cash flow in month 3 and the revised closing balance in month 3.
(c)[4]
State four reasons why a business might have cash flow problems.
(d)[6]
Explain one primary market research method and one secondary market research method that Veronique could have used.
(e)[6]
Do you believe creativity is the most important characteristic for 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 not served by traditional banks” …