Page 354 - Cambridge IGCSE Business Studies

Cambridge IGCSE Business Studies 27: Exam technique

Note: As in this example, both parts (c) and (d) of a question may contain the word
‘explain’. To understand the level of detail required, always check how many marks
are available. In the measurement of size question, there are only 4 marks, so a
simple (relevant) explanation is all that is needed. If it was a 6-mark question, the
answer should be developed further.

These types of questions could also be asked as part of a case study question.

The only difference is that they will have more marks allocated to them. Th is means
that you have to develop your answers even more.
For example, a more detailed explanation of level of revenue might be:
Level of revenue with only three drivers, he is not likely to be able to have a
large level of sales as they can only drive for a certain number of miles before
they have to rest. If Omar had more drivers, he could offer more passengers taxi

journeys, which could increase the level of sales turnover.
Don’t worry as there will be plenty of information in the case study that you can use.

e Omar could use a long-term loan to buy the vehicle or he could
lease a luxury car. Which do you think is the better option for his
business? Justify your choice. [6]

Extract from sample mark scheme:
Knowledge [1] – award 1 mark for identifi cation of relevant issue [max 1].
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Application [1] – award 1 mark if relevant reference made to Omar’s business.
Analysis [2] – award up to 2 marks for relevant development of point(s).

Evaluation [2] – justifi ed decision as to which is the better option for Omar
to choose.

Relevant points might include:
Leasing

■ Pay month by month for the use of the car [k].
■ Never own the asset [k] so has no fixed asset to sell if needed at the end of the
lease.
■ Costs of repair and maintenance is carried out by leasing company [k] so
lower variable costs for Omar [an].
■ Leasing charges can be high [k] so he might end up paying out more than
total cost of buying the vehicle [an].

Long-term loan

■ Have to pay interest and repay the loan [k], which will increase costs.
■ Have asset which can be sold aft erwards [k].
■ Bank might want security against Omar’s assets [k], so Omar might lose his
personal possessions if he cannot repay [an] as he is a sole trader [app].