EBM N4 November 2018 | Paper 1
EBM N4 November 2018 | Paper 1
Entrepreneurship and Business Management N4
Question 1.1
Various options are given as possible answers to the following questions. Choose the answer and write only the letter (A–D) next to the question number (1.1.1–1.1.10) on the attached ANSWER SHEET.
1.1.1 Personal resources of successful entrepreneurs:
A. Building
B. Recognition
C. Funds
D. Technology
C. Funds
Funds are a personal resource because an entrepreneur needs money to start, operate, and support the business.
1.1.2 To avoid pitfalls in a small business …
A. allow customers to buy on credit.
B. overinvest in fixed assets.
C. manage people effectively.
D. be confident.
C. manage people effectively
Effective people management helps reduce conflict, improve productivity, and avoid common business problems.
1.1.3 New products never created before are …
A. innovations.
B. inventions.
C. patents.
D. creativity.
B. inventions
An invention is something completely new that has not existed before.
1.1.4 Low-priced products that do not rely on a strong brand name recognition:
A. Shopping products
B. Consumer products
C. Convenience products
D. Speciality products
C. Convenience products
Convenience products are usually low-priced, bought often, and do not depend heavily on strong brand loyalty.
1.1.5 Drafting an organisational structure and an office administration plan:
A. Cover Page
B. Financial Plan
C. Marketing Plan
D. Management Plan
D. Management Plan
The management plan deals with how the business will be organised and run.
1.1.6 By examining the external environment, entrepreneurs can discover …
A. opportunities and threats.
B. strengths and weaknesses.
C. opportunities and strengths.
D. threats and weaknesses.
A. opportunities and threats
The external environment contains outside factors that may help or harm the business.
1.1.7 According to the new Companies Act of 2008, NO new … can be registered with the CIPC.
A. sole proprietorship
B. close corporation
C. partnership
D. private company
B. close corporation
New close corporations can no longer be registered, so this is the correct option for this paper.
1.1.8 A bank overdraft is an example of … financing.
A. short-term
B. medium-term
C. long-term
D. equity
A. short-term
A bank overdraft is used to solve temporary cash shortages, so it is short-term finance.
1.1.9 The practice of setting a relatively high introductory price to recover development and research costs is called the …
A. skimming strategy.
B. opportunistic strategy.
C. penetration strategy.
D. leader pricing.
A. skimming strategy
Skimming uses a high starting price to recover research and development costs quickly.
1.1.10 Naledi owns a bookshop. She decided on a mark-up policy of 10% on all her products. She buys a book for R60 and pays R10 for transport costs. Calculate the selling price.
A. 66
B. 70
C. 76
D. 77
D. 77
Total cost = R60 + R10 = R70.
Mark-up = 10% of R70 = R7.
Selling price = R70 + R7 = R77.
Question 1.2
Give ONE role of CIPC in entrepreneurship. (2)
Business registration
One important role of CIPC is registering businesses so that they can operate formally and legally.
Question 1.3
Of what value is social media (Twitter, Facebook, Instagram, etc.) for a business? (2 × 2)
Social advertisements are an inexpensive way to promote your business.
Social media gives businesses a low-cost way to advertise products and services to many people.
You gain key information about your competitors.
Social media helps a business observe competitor activity, offers, and customer response.
You gain key information about your customers.
Social media makes it easier to understand customer interests, opinions, and needs.
Question 1.4
Name THREE sources of equity financing. (3 × 2)
Own money
This is money contributed by the owner directly into the business.
Relatives and friends
Family or friends may provide capital to help start or support the business.
Equity shares
Equity shares raise finance by bringing in investors who contribute money in exchange for ownership.
Question 2.1
Construct a break-even graph showing the following information:
2.1.1 Break-even point
2.1.2 Fixed cost line
2.1.3 Sales line
2.1.4 Total cost line
2.1.5 Loss area
2.1.6 Profit area
2.1.7 Variable cost area
2.1.8 Fixed cost area
2.1.9 Break-even units
2.1.10 Break-even sales
The completed graph is as follows
Core Components
2.1.1 Break-even point
This is the point where total income equals total costs, so the business makes neither a profit nor a loss.
2.1.2 Fixed cost line: A horizontal line starting on the Y-axis. It remains constant regardless of production volume.
2.1.3 Sales line: Also known as the Total Revenue line. It starts at the origin (0,0) and slopes upward as sales increase.
2.1.4 Total cost line: This line starts at the same point as the Fixed Cost line and slopes upward, representing the sum of fixed and variable costs.
2.1.1 Break-even point: The exact intersection where the Sales line meets the Total Cost line.
Economic Indicators
2.1.5 Loss area: The triangular space to the left of the Break-even point where costs exceed sales.
2.1.6 Profit area: The expanding space to the right of the Break-even point where sales exceed costs.
2.1.7 Variable cost area: The region between the Fixed Cost line and the Total Cost line.
2.1.8 Fixed cost area: The rectangular region below the Fixed Cost line.
The Bottom Line
2.1.9 Break-even units: The value on the X-axis directly below the intersection (The quantity needed to cover all costs).
2.1.10 Break-even sales: The value on the Y-axis directly across from the intersection (The Rand amount needed to cover all costs).
Question 2.2
Name THREE methods of collecting primary data. (3 × 2)
Surveys
Surveys collect information directly from people through questions.
Traffic counts
Traffic counts measure the number of people or vehicles passing a location.
Observations
Observation means watching customers or situations directly to gather information.
Experimentation
Experimentation tests conditions or ideas to see what results they produce.