Do you think the directors of a private limited company should use its profits to reward shareholders or reward workers? Justify your answer (igcse)
Answers
Answer:
This mark scheme is published as an aid to teachers and candidates, to indicate the requirements of
the examination. It shows the basis on which Examiners were instructed to award marks. It does not
indicate the details of the discussions that took place at an Examiners’ meeting before marking began,
which would have considered the acceptability of alternative answers.
Mark schemes should be read in conjunction with the question paper and the Principal Examiner
Report for Teachers.
Cambridge will not enter into discussions about these mark schemes.
Cambridge is publishing the mark schemes for the May/June 2014 series for most IGCSE, GCE
Advanced Level and Advanced Subsidiary Level components and some Ordinary Level components.
Explanation:
(a) What is meant by a ‘marketing budget’? [2]
Good knowledge: [2] e.g. a financial plan or forecast for the marketing of a product for a
specified period of time
Some knowledge: [1] e.g. a financial plan or sum of money put aside for marketing
(b) Identify two methods of primary market research that Anouk could use. [2]
Application [2 × 1] 1 mark per method
Methods could include: Questionnaires/survey, interviews, observations, focus group
Do not accept marketing agency or field research as these are not appropriate for a small
business.
(c) Identify and explain two possible advantages for Anouk of hiring equipment. [4]
Knowledge [2 × 1] – award 1 mark for each relevant advantage
Application [2 × 1] – award 1 mark for each relevant different explanation
Relevant points might include:
• No need to spend a lot of money to buy equipment [k] might be too expensive for a sole
trader [app]
• Easier to update or change equipment as required [k] if she designs a new piece of
jewellery she does not have to buy more equipment [app]
• Able to afford the best equipment [k] to help her to make her jewellery more
efficiently[app]
• If the machine is broken Anouk does not have to pay owner cost of repair [k] as a small
business owner she does not have much money [app]
• Machinery is only rented when needed [k] so saving space at home [app].
Note: Do not accept cheaper or saves costs as these are too vague.
(d) Identify and explain two disadvantages to Anouk to having a business partner. [6]
Knowledge [2 × 1] – award 1 mark for each disadvantage identified
Application [2 × 1] – award 1 mark if relevant reference made to Anouk
Analysis [2 × 1] – award 1 mark for each relevant explanation
Note: For each reason maximum 3 marks [1k + 1app + 1an].
Relevant points might include:
• Have to share profits [k] so she might earn less [an] than if she were a sole trader [app]
• Share workload: [k] Anouk enjoys doing both designing and selling [app] sharing could
lead to conflict [an]
• Unlimited liability [k] just like a sole trader [app] Anouk’s personal assets are still at risk
[an]
• Slower decision making [k] as she has to discuss decisions such the marketing budget
[app] which could mean she misses sales[an]
• They might have different objectives [k] the partner might not want to just sell at markets
[app] this could lead to disagreements[an]
• Partnership agreements cost time and money [k].