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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 30 Minutes

100 Marks

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IB BUSINESS MANAGEMENT SL, Paper 2, May, 2008, TZ0, Solved Past Paper

Master the 2008 IB May for Paper 2 Business Management SL with examiner tailored solutions and comments for TZ0

Question 1 [Explained]

Silvia and Daniel are planning to open a school named the Cochabamba Academy in Bolivia. They are analyzing financial data to determine if the Academy will be profitable with an initial capital investment of $$ 63, 000$ . They are concerned about potential cash flow issues and have gathered the following financial information:

Planned Inflows:

A monthly school fee of $$ 200$ per student, collected from February to November.
An annual registration fee of $$ 300$ in October.

Planned Outflows:

11 teachers employed at $$ 500$ per month, per teacher.
Salaries of $$ 2, 000$ each per month for Silvia and Daniel.
Average monthly expenses of $$ 20, 000$ .

They plan to open 8 classes, each with an average of 20 children. Below is an excerpt from a cash flow forecast they have prepared:

	September	October	November	December
Inflows	Fees	32000	32000	32000	0
Registration fee		80000
Total Inflows	32000	80000	32000	0
Outflows	Salaries	9500	9500	9500	9500
Expenses	20000	20000	20000	20000
Total Outflows	29500	29500	29500	29500
Net cash flow	2500
Opening balance	15000
Closing balance	17500

Question 1 [a] [Explanation]

This part of the question requires you to identify specific values from the cash flow forecast for the Cochabamba Academy. You need to state the values for the net cash flow in October, the closing balance in October, the closing balance in November, and the net cash flow in December. These values will help assess the financial health and cash flow position of the Academy during these months.

Question 1 [a] [ii] [Explanation]

This part asks you to comment on the cash flow position of the Cochabamba Academy. You need to analyze the cash flow situation, considering the inflows and outflows, and provide insights into the financial health of the Academy. Pay attention to the months with no inflows and the role of registration fees in maintaining a positive cash flow.