EBM N4 June 2019 | Paper 1

EBM N4 June 2019 | Paper 1

Entrepreneurship and Business Management N4

Indicate whether the following statements are TRUE or FALSE.

Question 1.1

1.1.1 An entrepreneur who is not planning to apply for a bank loan does not need a business plan.

False
A business plan is not only for bank loans. It is also used for planning, guiding, and managing the business.

1.1.2 An entrepreneur is a person who creates a new business and bears the risk of losing that business.

False
The statement is false for this paper, so it must be learned exactly as given in the marking guideline.

1.1.3 At the end of the lease period, equipment is returned to the company that leased it.

True
Leasing gives the business the use of equipment for a period, and at the end of that period the equipment is returned to the leasing company.

1.1.4 The only factor to take into consideration when deciding on the location of a business is the visibility factor.

False
Visibility is important, but it is not the only factor. Entrepreneurs must also consider issues such as access, costs, customers, and suitability of the location.

1.1.5 A slogan is a clever phrase or sentence that says something good about a product, service or business.

True
A slogan is meant to create a memorable and positive message about the product, service, or business.

1.1.6 Economic factors can influence sales scenarios.

True
Economic conditions such as inflation, unemployment, and general spending power can affect how much customers buy.

1.1.7 Shareholders get a dividend after the company announces its profits.

True
Shareholders may receive dividends from company profits after those profits are declared.

1.1.8 Impulsive purchases are unplanned purchases.

True
Impulsive purchases happen without prior planning, usually because the customer decides to buy on the spot.

1.1.9 The idea with the odd pricing technique is to gain quick acceptance in the market.

False
Odd pricing is about making a price look lower psychologically, such as 99.99. Quick acceptance in the market relates more to penetration pricing.

1.1.10 The price policy of a business offers important information about the overall image of the business.

True
Pricing helps communicate the image of the business, for example whether it positions itself as affordable, premium, or exclusive.

Question 1.2

Give ONE term for each of the following descriptions.

1.2.1 Point at which the total expenditure of a business is equal to the total income

Break-even point
This is the stage where the business makes neither a profit nor a loss because income and expenditure are equal.

1.2.2 Products are purchased only after customers have compared a variety of similar and competitive products

Shopping
Shopping products are bought after comparison of price, quality, style, or features.

1.2.3 Financial statement that summarises the revenues and expenses generated by the business

Income statement
An income statement shows the revenues and expenses of the business and helps indicate profit or loss.

1.2.4 Value that fixed assets lose over time as they are being used

Depreciation
Depreciation is the reduction in value of fixed assets as they are used over time.

1.2.5 System by which one pays for machinery/equipment in regular instalments while having the use thereof

Hire purchase
Hire purchase allows the business to use the machinery or equipment while paying for it over time in instalments.

1.2.6 Pictures of famous personalities printed on packaging

Kaleidoscope packaging
This packaging style uses eye-catching visual appeal, including famous personalities, to attract attention.

1.2.7 Expenses that stay the same month after month

Fixed costs
Fixed costs do not change with the level of production or sales in the short term.

1.2.8 Distinguishes a product from similar competitive products

Trademark
A trademark identifies and distinguishes a product from similar competing products.

1.2.9 Costs incurred prior to opening a business and making sales to provide cash flow

Pre-operating costs
These are costs incurred before the business begins operating and making sales.

1.2.10 Most common instrument for collecting primary data

Surveys
Surveys are commonly used to collect primary data directly from respondents.

Question 1.3

Which creativity method has been used in each of the following pictures:

1.3.1 Which creativity method has been used in the picture below ? (Main idea with branches)

Mind mapping
The picture shows one central idea with connected branches, which is the structure of a mind map.

1.3.2 Which creativity method has been used in the picture? (group of people generating ideas)

Brainstorming
A group sharing ideas together represents brainstorming.

1.3.3 Which creativity method has been used in the picture? (camera with listed features)

Attribute analysis
The listed features of the camera show the product being broken into attributes for examination.

1.3.4 Which creativity method has been used in the picture? (bed + breakfast)

Forced connections
The picture combines two separate ideas to create a new idea, which is forced connections.

Question 1.4

What does government force businesses to abide with?

Rules and regulations
Government requires businesses to follow rules and regulations in order to operate legally and properly.