Could not load assets. Please refresh the page.

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

 

100 Marks

 

Calculator NOT allowed

IB BUSINESS MANAGEMENT SL, Paper 2, November, 2010, TZ0, Solved Past Paper

Master the 2010 IB November for Paper 2 Business Management SL with examiner tailored solutions and comments for TZ0

Question 1 [Explained]

Alejandra Morales manages a meat wholesale business in Panama City, which was originally established by her father. The business transitioned from a sole trader to a private limited company upon her father's retirement. Alejandra is gradually acquiring more shares of the company, purchasing an additional 5% each year. The company is financially stable, with a consistent positive cash flow and no debts. Alejandra plans to expand by opening a new wholesale facility in the northern part of the city. This expansion requires renting a building and purchasing new equipment, financed by a bank loan. The sales are projected to start at US $10,000 in January 2011, with an expected growth of 2% per month over the next six months. Sales will be on credit, with payments due in 30 days. The forecasted expenses for the new facility include monthly purchases from suppliers, various monthly charges, and bi-monthly electricity expenses. Alejandra's father, who still holds 60% ownership, is concerned about the optimistic sales forecasts. To motivate the senior butcher at the new facility, Alejandra is considering various financial rewards.

Question 1 [a] [Explanation]

This question asks you to outline two advantages for Alejandra's father of changing the legal status of LCS from a sole trader to a private limited company. Consider the implications of this change in terms of liability, ownership, and the ability to raise capital.

Question 1 [b] [i] [Explanation]

This question requires you to prepare a monthly cash-flow forecast for the first six months of operation of the new wholesale facility of LCS. Consider all the forecasted cash inflows and outflows, including sales, loan, purchases, and expenses.

Question 1 [b] [ii] [Explanation]

This question asks you to comment on the impact that the new wholesale facility will have on the current cash position and cash flow of LCS. Consider both the short-term and long-term effects, as well as any potential risks or challenges.

Question 1 [c] [Explanation]

This question requires you to examine two financial rewards that LCS could use to encourage effective leadership and strong performance by the senior butcher. Consider the advantages and disadvantages of each reward, and how they align with the company's goals.

Question 2 [Explained]

ThaiModa is a manufacturing company based in Thailand, producing various types of furniture, including office, residential, and specialized furniture for elderly people under the brand "ThaiModa Health and Care" (TMHC). The company has a strategic alliance with Sleek Textiles, a luxury fabric manufacturer, allowing them to sell each other's products and share resources. ThaiModa is considering a joint venture with Sleek Textiles to develop new antibacterial fabrics, particularly for use in TMHC products. The financial data provided includes selected items from ThaiModa's profit and loss account and balance sheet for the year ended 31 May 2009, expressed in millions of Thai baht. This data will be used to analyze the company's financial position and potential strategic moves.

Question 2 [a] [Explanation]

This question asks you to outline two differences between a strategic alliance and a joint venture, specifically in the context of ThaiModa and Sleek Textiles. A strategic alliance involves a formal agreement between companies to cooperate for mutual benefit, while a joint venture involves creating a new legal entity jointly owned by the participating companies. Consider how these differences might impact the relationship between ThaiModa and Sleek Textiles.

Question 2 [b] [Explanation]

This question requires you to calculate the missing figures X, Y, and Z from ThaiModa's balance sheet and construct a complete balance sheet for the year 2009. The balance sheet provides a snapshot of the company's financial position, detailing its assets, liabilities, and equity. Use the financial information provided to fill in the missing values and ensure that the balance sheet balances, with total assets equaling the sum of liabilities and equity.