These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.
These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.
These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.
These are explanations and solutions for IB past papers, not the official version. For official papers, you can go to IB Follet or access them through your school.
01 Hours 45 Minutes
60 Marks
Calculator is allowed
IB BUSINESS MANAGEMENT SL, Paper 2, May, 2015, TZ0, Solved Past Paper
Master the 2015 IB May for Paper 2 Business Management SL with examiner tailored solutions and comments for TZ0
Question 1 [Explained]
Nzuri Kio (NK) is a company that manufactures glass products such as windows and table tops. NK operates within a regional trading bloc of eight developing countries. The company is located in a country with limited public sector services, inefficient government, and poor infrastructure. The manager of NK is considering purchasing new, high-quality equipment from Carrucci SpA, an Italian company known for its innovative and efficient glass-making machines. The new equipment, costing $800,000, would improve product quality, potentially increasing sales and gross profit margin. NK is evaluating two financing options: a $720,000 seven-year bank loan (Option A) or selling $800,000 in shares (Option B).
Question 1 [a] [Explanation]
This question requires you to use the PEST framework to describe two external factors that may affect NK. PEST stands for Political, Economic, Social, and Technological factors. These factors can influence NK's operations and decision-making processes.
Question 1 [b] [i] [Explanation]
This question asks you to calculate the loan capital (X) using the financial information provided. You need to show all your working to arrive at the correct value of X.
Question 1 [b] [ii] [Explanation]
This question requires you to construct a fully labelled balance sheet for NK. Ensure that all figures are accurately placed and the balance sheet is properly formatted.
Question 1 [b] [iii] [Explanation]
This question asks you to calculate NK's gross profit margin. No working is required, so you only need to provide the final percentage.
Question 1 [b] [iv] [Explanation]
This question requires you to calculate NK's forecasted gearing ratio for both Option A and Option B. Show all your working to arrive at the correct percentages.
Question 1 [c] [Explanation]
This question asks you to examine the disadvantages of Option A and Option B as sources of finance for the purchase of the new equipment. You need to provide a balanced response, addressing the disadvantages of both options.