™

Cambridge IGCSE

BUSINESS STUDIES 0450/11

*9504537922*

Paper 1 Short Answer and Data Response October/November 2023

1 hour 30 minutes

You must answer on the question paper.

No additional materials are needed.

INSTRUCTIONS
• Answer all questions.
• Use a black or dark blue pen. You may use an HB pencil for any diagrams or graphs.
• Write your name, centre number and candidate number in the boxes at the top of the page.
• Write your answer to each question in the space provided.
• Do not use an erasable pen or correction fluid.
• Do not write on any bar codes.
• You may use a calculator.

INFORMATION
• The total mark for this paper is 80.
• The number of marks for each question or part question is shown in brackets [ ].

This document has 12 pages. Any blank pages are indicated.

co
e.
at
-m
am

11_0450_11_2023_1.12
[Turn over
x

© UCLES 2023
.e
w
w
w
 2

1 Desmond wants to be a successful entrepreneur. He has decided to leave his office job to start up
a gardening business cutting grass and planting flowers. It will be an unincorporated business.
Desmond is aware that a new business is at greater risk of failure than an established business.
He has identified his business objectives for the first year. Desmond has calculated he will need
$750 for his start-up capital.

(a) Define ‘unincorporated business’.

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [2]

(b) Identify two objectives a new business might have.

Objective 1: .......................................................................................................................

...........................................................................................................................................

Objective 2: .......................................................................................................................

........................................................................................................................................... [2]

(c) Identify four characteristics of a successful entrepreneur.

Characteristic 1: ................................................................................................................

...........................................................................................................................................

Characteristic 2: ................................................................................................................

...........................................................................................................................................

Characteristic 3: ................................................................................................................

...........................................................................................................................................

Characteristic 4: ................................................................................................................

........................................................................................................................................... [4]
m
co
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12

x
.e
w
w
w
 3

(d) Explain two reasons (other than lack of finance) why Desmond’s new business might be at
greater risk of failure than an established business.

Reason 1: .........................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Reason 2: .........................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [6]

(e) Do you think owner’s savings are the most suitable source of finance for a start-up business?
Justify your answer.

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................
m
co

........................................................................................................................................... [6]
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12 [Turn over

x
.e
w
w
w
 4

2 LCT manufactures cooking pots. It has 16 employees. As a small business LCT uses social media
as its method of advertising. The owner, Carole, knows having a good brand image is important.
She is analysing LCT’s break-even chart. This is shown in Fig. 2.1. Carole is considering possible
ways to lower LCT’s break-even level of output.

Break-even chart for LCT

12 000
10 000 total revenue
8000
costs / revenue total costs
6000
($)
4000
2000 fixed costs

0 100 200 300 400 500 600 700 800 900 1000
units
Fig. 2.1

(a) Identify two limitations of break-even analysis.

Limitation 1: ......................................................................................................................

...........................................................................................................................................

Limitation 2: ......................................................................................................................

........................................................................................................................................... [2]

(b) Calculate LCT’s profit if it sells 800 units. Show your working.

Working: ...........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Final answer: .................................................................................................................... [2] m

co
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12

x
.e
w
w
w
 5

(c) Outline two possible benefits to LCT of having a good brand image.

Benefit 1: ..........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Benefit 2: ..........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [4]

(d) Explain two ways LCT might lower its break-even level of output.

Way 1: ...............................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Way 2: ...............................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [6]
m
co
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12 [Turn over

x
.e
w
w
w
 6

(e) Do you think social media is the best method of advertising for a small business to use? Justify
your answer.

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [6]

m
co
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12

x
.e
w
w
w
 7

3 ACP manufactures computers. Being ethical is important to ACP. The business employs 3000
workers in its factory. ACP imports 65% of its raw materials. As internal users of accounts, the
directors plan to analyse ACP’s financial performance using profitability ratios. The Finance Director
thinks making a profit is more important for a business than managing its cash flow.

(a) Identify two external users of accounts.

User 1: ..............................................................................................................................

...........................................................................................................................................

User 2: ..............................................................................................................................

........................................................................................................................................... [2]

(b) Identify two profitability ratios.

Ratio 1: .............................................................................................................................

...........................................................................................................................................

Ratio 2: .............................................................................................................................

........................................................................................................................................... [2]

(c) Outline two possible reasons why ACP imports its raw materials.

Reason 1: .........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Reason 2: .........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [4]
m
co
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12 [Turn over

x
.e
w
w
w
 8

(d) Explain one benefit and one limitation to ACP of being ethical.

Benefit: .............................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Limitation: .........................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [6]

(e) Do you think making a profit is more important for a business than managing its cash flow?
Justify your answer.

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................
m

........................................................................................................................................... [6]
co
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12

x
.e
w
w
w
 9

4 MRN is a food retailer. It has 490 shops and 70 000 employees. MRN has announced plans to
close 80 of its shops. The Human Resources Director said: ‘20% of management jobs will be
removed. We want to encourage delegation. MRN will continue to follow legal controls over
employment.’ MRN’s directors know it is important that businesses respond to increased competition.

(a) Define ‘delegation’.

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [2]

(b) Identify two legal controls over employment.

Legal control 1: .................................................................................................................

...........................................................................................................................................

Legal control 2: .................................................................................................................

........................................................................................................................................... [2]

(c) Outline two functions of MRN’s shop managers.

Function 1: ........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Function 2: ........................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [4]
m
co
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12 [Turn over

x
.e
w
w
w
 10

(d) Explain two factors MRN should consider when deciding which shops to close.

Factor 1: ...........................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

Factor 2: ...........................................................................................................................

...........................................................................................................................................

Explanation: ......................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [6]

(e) Explain two ways a retail business could respond to increased competition. Which would be
the best way to use? Justify your answer.

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

...........................................................................................................................................

........................................................................................................................................... [6]
m
co
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12

x
.e
w
w
w
 11

BLANK PAGE

m
co
e.
at
-m
am

© UCLES 2023 11_0450_11_2023_1.12

x
.e
w
w
w
 12

BLANK PAGE

Permission to reproduce items where third-party owned material protected by copyright is included has been sought and cleared where possible. Every
reasonable effort has been made by the publisher (UCLES) to trace copyright holders, but if any items requiring clearance have unwittingly been included, the
publisher will be pleased to make amends at the earliest possible opportunity.

To avoid the issue of disclosure of answer-related information to candidates, all copyright acknowledgements are reproduced online in the Cambridge
m

Assessment International Education Copyright Acknowledgements Booklet. This is produced for each series of examinations and is freely available to download
co

at www.cambridgeinternational.org after the live examination series.

e.
at

Cambridge Assessment International Education is part of Cambridge Assessment. Cambridge Assessment is the brand name of the University of Cambridge
-m

Local Examinations Syndicate (UCLES), which is a department of the University of Cambridge.

am

© UCLES 2023 11_0450_11_2023_1.12

x
.e
w
w
w