Qfalms >3tkc7JEll9i48 |BIMIJun19l922512 'l 6 17 Do not write outside the Item F box Electro has been making a good profit despite the business being small. Lee and Yasmine are considering expanding the business by opening a new shop. They have found a location in a different part of the city where they can rent warehouse storage. They agree that it would be best to wait a few more months and then use the retained profit to open the new shop. EELE Analyse why Electro might choose to use retained profit to fund the growth of the business. [6 marks] Extra space Turn over > O'OSLO 9:48 18 Do not write outside the box Item G Electro converts MYR 50 000 into US$ every month in order to import the electrical appliances. In recent months the exchange rate between the Malaysian Ringgit and the US$ has changed, which has affected the price that Electro pays for the appliances. Table 3 shows the amount in US$ that Electro has received for the previous 6 months. Table 3 Month Jan Feb Mar Apr May Jun US$ 12 053 11 800 10 988 11 300 11 500 11 100 As a small local business, Electro does not benefit from economies of scale as large global companies do. This means that Electro's costs have to be carefully managed. 1 1. 5 What is meant by an exchange rate? [2 marks] 1 1 . 6 Explain one problem Electro may have if the MYR / US$ exchange rate has a severe fluctuation. [3 marks] 8 IB/M/Jun19/9225/2 19 Do not write outside the 1 1. 7 Globalisation offers benefits and drawbacks to businesses such as Electro. boxO'OSLO 9:48 18/24 8 IB/M/Jun19/9225/2 19 Do not write outside the 1 1. 7 Globalisation offers benefits and drawbacks to businesses such as Electro. box Yasmine sees the benefits of globalisation and would like Electro to expand internationally. Lee would prefer to expand only within Malaysia Recommend whether the business should either expand internationally to gain the benefits of globalisation or . expand only within Malaysia. Refer to Items E, F and G in your answer. [12 marks]