1.1 Evaluate a minimum of five sources of finance available to businesses e.g. trade credit, overdraft, factoring, leasing, hire purchase, profit retention, etc. and identify advantages and disadvantages of each.

2.1 Evaluate the strengths and weaknesses of break-even analysis.

2.2 Use data to calculate contribution and contribution per unit and break-even output.

2.3 Construct break-even charts and analyse the effect on them of changing variables.

3.1 Explain the importance of cash flow forecasts for businesses

3.2 Evaluate at least two methods used to forecast cash flow.

Question 1

Levi Roots is an entrepreneur who has been running his sole trader business for 15 years, selling a home made sauce, aptly named, ReggaeReggae Sauce. He is planning on expanding his business so that he can start supplying the big supermarkets, like Asda and Tesco. Evaluate two possible sources of finance that Levi Roots can tap into as he seeks to grow his sole trader business.

(Question 1 satisfies criterion 1.1).

Question 2.

Texas Inc. is a large for profit public limited company that produces and sells top of the line 86inch Tech3 Plasma TV with a price tag of 2,200 per TV. It costs Texas Inc. 1,200 to manufacture a single Tech3 Plasma TV. The company's fixed costs for every quarter are 2 million. a. How many Tech3 Plasma TVs were sold in the first quarter of 2020 for Texas Inc. to break even? b. How much revenue does Texas Inc. need to generate in order to break even (Question 3 satisfies criterion 2.2)

Question 3.

Trevor Maxwell runs a sole trader type of business. He is about to open his first hotel. He has forecast the following costs and revenues: Maximum number of customers per month... 800 Monthly fixed costs ................................. 10,000 Charges (SP) per customer .................. 110 Variable costs per customer .................. 90

a. Construct a BE graph (chart) for Trevor's planned business.

b. Trevor has decided to increase his charges (prices) per customer to 120. Draw a new TR line on your graph (chart) to show the effect of this change. On the ruled paper provided; explain what is happening due to the price increase.

c. Mark on graph (chart) the new BE point.

d. Using the hotel's maximum number of guests, calculate (total) contribution at the new SP

(Question 4 satisfies criteria 2.1, 2.2 & 2.3).

Question 4

Evaluate the break-even analysis to show that it is the most vital part of a business plan for a new business.

(Question 2 satisfies criterion 2.1)