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Prelim Business

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Prelim Business

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christina.lee1404

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You are on page 1/ 14

NESA NUMBER: …………………………………….

Preliminary
Business Studies
Yearly Examination 2020
Total marks – 70

General Instructions Section I Pages 1–5

• No reading time 20 marks
• Working time – 2 hours • Attempt Questions 1–20
• Write using black pen • Allow about 35 minutes for this section
• NESA approved calculators
may be used Section II Pages 6–11
30 marks
• Attempt Questions 21–23
• Allow about 50 minutes for this section

Section III Page 12

20 marks
• Attempt Question 24
• Allow about 35 minutes for this section
Section I
20 marks

Attempt Questions 1-20

Allow about 35 minutes for this section

1 Which of the following represents a business performing the role of wealth creation?

(A) Increasing the financial return of investors

(B) Improving the features of existing products
(C) Offering consumers a choice of products aimed at improving quality of life
(D) Providing an opportunity to transform ideas into finished goods and services

2 Nadalla Pty Ltd is an Australian producer of cheese. It employees 75 people.

How can this business be classified?

Legal Structure Size

(A) Public Company Medium

(B) Private Company Large

(C) Public Company Large

(D) Private Company Medium

3 How could an increase in economic activity negatively impact upon businesses?

(A) Decreased production could result in reduced demand for labour

(B) Increased employment opportunities could lead to higher wage costs
(C) Increased spending by consumers could lead to higher business profits
(D) Decreased consumer confidence could result in a decline in business sales

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4 Which of the following represents a cause and consequence for a sole trader who is experiencing
involuntary business cessation?

Cause Consequence

(A) The owner chooses to retire The assets of the business are
placed into liquidation

(B) The owner is unable to repay the The owner faces the possibility of
debts of the business bankruptcy

(D) Debtors do not repay funds owed The business is placed into
to the business voluntary administration

5 Due to a change in government policies, one Australian owned airline is now facing
increased competitive pressures from many foreign competitors.

How can this change in competitive situation be best described?

(A) Oligopoly to Duopoly

(B) Monopoly to Oligopoly
(C) Duopoly to Monopolistic Competition
(D) Monopolistic Competition to Monopoly

6 Which key business function is concerned with the transformation of inputs into outputs?

(A) Finance
(B) Marketing
(C) Operations
(D) Human Resources

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7 JetAir was established in 2017. The business has total assets of $9.6million. Its current liabilities
are valued at $3.2million and long-term creditors are owed $5 million. Owners have invested
$1.4 million to establish the business, with all profits being returned to owner for their personal
use.

What is the value of retained profits?

(A) $0
(B) $1.4million
(C) $8.2million
(D) $9.6million

8 A couple are hoping to establish a new business.

Which of the following represents an advantage of this establishment option?

(A) The business owners will acquire existing customers, staff and suppliers
(B) The business owners are purchasing a business name with strong brand awareness
(C) The business owners may encounter resistance from staff loyal to the previous
owners
(D) The business owners will save on goodwill as the business has no established
reputation or brand image

9 Which of the following represents a legal influence in the establishment of a business?

(A) The training and development provided to new employees

(B) The on costs provided to employees as part of their employment in the business
(C) The decision to fund the businesses operations through debt and equity financing
(D) The pricing policies used by the business to maximise its profitability in the long term

10 Controlling, as a role of management can be best described as the

(A) ability to determine the tasks and duties of employees in the workforce.
(B) ability to determine how goods and services will be produced in the business.
(C) process of reviewing the performance of the business and determining comparing it
against actual plans.
(D) process of establishing goals for the business and determining which area of the
business can best achieve these goals.

11 How can a business that only operates within Australia be best described?

(A) As global

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(B) As local
(C) As multinational
(D) As national

12 C&F Sports holds 25% of the sales within the sporting goods industry.

Which business goal has C&F Sports achieved?

(A) Profits
(B) Share price
(C) Market share
(D) Environmental

13 A break-even analysis is used to determine the

(A) fixed costs to break even.

(B) cost of production to break even.
(C) funds borrowed by the business to break even.
(D) amount of goods needed to be sold to break even.

14 What is an advantage of staff involvement for a business in the decision-making process?

(A) Increased rewards for all staff

(B) Increased levels of absenteeism
(C) More conflict between management and staff
(D) Improved commitment towards achieving business goals

15 Greta ensures that all of her make-up products are not tested on animals and are packaged using
reusable materials.

Which stakeholders are most likely affected by Greta’s actions?

(A) Customers and managers

(B) Society and environment
(C) Society and shareholders
(D) Managers and shareholders
16 Which of the following is an example of an opportunity for a fish and chips shop?

(A) Low inflation

(B) Inexperienced chefs
(C) Updated kitchen equipment
(D) Restrictions with fishing laws

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17 Which forecasting tool is best used to obtain information about a business’ expected cash
receipts and cash payments?

(A) Break-even analysis

(B) Cash flow statement
(C) Cash flow projection
(D) Profit and Loss Statement

18 Which strategy can best assist the marketing department of a small ice-cream manufacturer to
achieve a competitive advantage?

(A) Hiring young staff

(B) Leasing equipment
(C) Using imported milk products
(D) Diversifying their product range

19 George encourages his staff to work in teams to complete tasks and values their contributions for
improving business processes.

Which leadership style is George adopting?

(A) Autocratic
(B) Democratic
(C) Strategic
(D) Transformational

20 Which of the following is an example of a Federal tax that applies to businesses in Australia?

(A) Income tax

(B) Stamp duty
(C) Payroll tax
(D) Water levy

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Section II
30 marks

Attempt Questions 21-23

Allow about 50 minutes for this section

Question 21 (10 marks)

(a) Identify TWO personal characteristics of an entrepreneur. 2

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(b) Explain the importance of having a business plan when starting a new business. 3

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Question 21 continues on the next page

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Question 21 (continued)

(c) Examine how a business can effectively manage change. Support your answer with an example.
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